1. What is the primary difference between a static budget and a flexible budget? A) The static budget contains only fixed costs, while the flexible budget contains only variable costs. B)) The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels. C) The static budget is constructed using input from only upper level management, while a flexible budget obtains input from all levels of management. D) The static budget is prepared only for units produced, while a flexible budget reflects the number of units sold. 2. Another name for the static budget is A) master budget. B) overhead budget. C) permanent budget. D) flexible budget. 3. Management by exception A) causes managers to be buried under voluminous paperwork. B) means that all differences will be investigated. C) means that only unfavorable differences will be investigated. D) means that material differences will be investigated. 4. Under management by exception, which differences between planned and actual results should be investigated? A) Material and noncontrollable B) Controllable and noncontrollable C) Material and controllable D) All differences should be investigated 5. If actual costs are greater than standard costs, there is a(n) A) normal variance. B) unfavorable variance. C) favorable variance. D) error in the accounting system,