1. Which of the following is true of a budget? A) It is used to express a firm's operational, as opposed to strategic, plans. B) It is used to account only the financial aspects of the upcoming period. C) It is most useful when it is planned independently of the firm's strategic plans. D) It helps managers to revise their plans and strategies. 2. Management adopts the practice of developing budgets that are reasonably challenging to: A) discourage out-of-the-box and creative thinking as there is very little room for error: B) motivate improved performance as employecs work more intensely to avoid failure. C) set unrealistic expectations and are perceived as overly ambitious and unachievable. D) increase anxiety without motivation not meeting them is viewed as a failure. 3. Lower-level managers should be involved in the budget process because top managers would want: A) to benefit from their experience with the day-to-day aspects of running the business B) to reduee the time and cost expended in the budgeting process C) to ensure that they do not introduce any budgetary slack. D) to ensure that the bodgets are administered rigidly given the changing market conditions. 4. Watermelon Corporation has budgeted sales of 29,000 units, targeted ending finished goods inventory of 8,000 units, and beginning finished goods inventory of 4,000 units. How many units should be produced next year? A) 29.000 units B) 33,000 units C) 37000 units