1. A favorable materials price variance may be caused by: A. Low quality materials purchased at a lower cost than expected. B. Higher quality materials purchased at a higher cost resulting in fewer materials being used than expected. C. Highly skilled employees using fewer materials than expected. D. A reduction in suppliers causing an unexpected increase in price 2. If a company purchased equipment by obtaining a loan, it would be recorded on the cash flow as: A. an operating activity. B. an investing activity. C. a financing activity. D. a noncash activity. 3. The CEO of manufacturing company asks which the company should create: A. A flexible budget B. A static budget C. Both a flexible and static budget D. Neither are applicable 4. The following cash inflows were given for two investments; both have initial investments of $45,000. Investment Alnvestment B Year 1 $20,000 $20,000 Year 2 30,000 50,000 Year 3 50,000 30,000 Total inflows $100,000 $100,000 Without making any calculations, which investment will have the higher net present value? A. Investment B because it generates most of the cash inflows early on. B. Investment A because there is an increasing trend in cash inflows. C. The net present values of Investment A and B are equal. D. None of the answer choices is correct. 5. (Use the information in question 4) Using the payback period method, which investment is best? A. Investment B B. InvestmentA. C. Investment AandBareequal. D. You cannot make a choice, with the information given. 6. Which of the following is required to record the cost of goods sold on the budgeted income statement? A. the cash disbursement amount from the cash budget B. the amount calculated on the merchandise purchase budget C. the number of units sold. D. None of the answer choices is correct