1. The first step of the budget process is: A. plan. B. direct. C. control. D. feedback. 2. Static budget are often used by: A production department. B. administrative departments. C. responsible centers. D. capital projects. 3. A budget serves as a benchmark against which A. Actual results can be compared. B. Allocated results can be compared. C. Actual results become inconsequential. D. Allocated results become inconsequential. 4. The following are characteristics of an effective budget, EXCEPT: A. Goals should be attainable. B. Evaluations should be made carefully with opportunities to explain any failures. C. They should be properly applied to avoid negative effects. D. Customers affected by a budget should be consulted when it is prepared. 5. Which of the following is NOT a benefit of budgeting? A. It forces managers to look to the future. B. It plays an important role in communication within the organization. It serves an important role in motivating and rewarding employees. D. It encourages executives to build up organizational slack. C