1) Which of the following is true of master budgets? A) They include only financial aspects of a plan and exclude nonfinancial aspects. B) Includes both financial and nonfinancial aspects of management's plans. C) They aid in quantifying the expectations of all stakeholders. D) They must be administered rigidly after they are committed to. 2) Operating decisions primarily deal with A) the best use of scarce resources B) how to obtain funds to acquire resources C) acquiring equipment and buildings D) satisfying stockholders 3) A master budget A) is the initial plan of what the company intends to accomplish in the period and evolves from both the operating and financing decisions B) is only prepared for manufacturers as they are the only type of company with material purchases and work-in-process accounts. C) improves companies' market capitalization and evolves from both the investing and financing decisions D) is another name given to the financial budget 4) A limitation of using past performance as a basis for judging actual results is that A) future conditions can be different from the past B) any undervaluation of profits in the past period is likely to continue C) any subsequent change in accounting treatment will distort performance evaluation D) they tend to distort results when current and past conditions are similar 5) Budgeted production equals _ A) beginning finished goods inventory + budgeted unit sales - targeted ending finished goods inventory B) targeted ending finished goods inventory + beginning finished goods inventory - budgeted unit sales C) budgeted unit sales + targeted ending finished goods inventory - beginning finished goods inventory D) budgeted unit sales + targeted ending finished goods inventory + beginning finished goods inventory