1. Which of the following statements concerning zero-based budgeting is true?

A.Zero-based budgeting specifies that every line item must be rounded to the nearest thousand dollar increment.

B.Zero-based budgeting specifies that every expenditure must be justified.

C.Zero-based budgeting is a variation of the incremental approach.

D.Zero-based budgeting is mainly used to assess research and development departments and similar departments where the relationship between inputs and outputs is weakest.

2.The Mighty Manufacturing Company expects to incur the following per unit costs for 1,000 units of production:

Direct materials	2 lb. @ $40 = $80
Direct labor	1 hr. @ $48 = $48
Variable overhead	75% of direct labor costs
Fixed overhead	50% of direct labor costs

What is the total cost reported in the manufacturing cost budget?

A)	$128,000
B)	$ 47,000
C)	$ 94,000
D)	$ 80,000