1. What limits the usefulness to managers of fixed budget performance reports?

2. Identify the main purpose of a flexible budget for managers.

3. What type of analysis does a flexible budget performance report help management perform?

4. In what sense can a variable cost be considered constant?

5. What department is usually responsible for a direct labor rate variance? What department is usually responsible for a direct labor efficiency variance? Explain.

6. What is a price variance? What is a quantity variance?

7. What is the purpose of using standard costs?