1) Which of the following statements is true with respect to the budgetary control process?

a.It involves at least four distinct steps.

b.It is not an important process in a business organization.

c.It has nothing to do with comparing actual results to planned objectives.

d.Accounting personnel should not be involved with this phase of the budget.

e.All of the above.

2)Which formula may be used to compute the labor rate variance?

a.(Actual hours - Standard rate) x Actual hours

b.(Actual hours - Standard hours) x Actual rate

c.(Actual rate - Standard rate) x Actual hours

d.(Actual rate - Standard rate) x Standard hours

3)Which of the following is a true statement regarding the purpose of flexible budgets?

a.Flexible budgets are also known as static budgets.

b.They are budgets that are developed at the start of the year and never adjusted.

c.They are of no use in comparing or evaluating actual results.

d.Flexible budgets are also known as variable budgets

4)The Sydne Manufacturing Company prepared a fixed budget of 160,000 direct labor hours, with planned overhead costs of $800,000 for variable overhead and $240,000 for fixed overhead. Preparing a flexible budget at 100% capacity of 200,000 labor hours, what would be the variable and fixed costs at 100% capacity?

a.$1,000,000 and $300,000

b.$800,000 and $240,000

c.$800,000 and $300,000

d.$1,000,000 and $240,000

5)Which of the following is a characteristic of management by exception?

a.Management by exception means that managers focus attention on the most significant variances and give less attention to areas where performance is reasonably close to the standard.

b.The practice allows managers to concentrate on the irregular situations.

c.The practice can be extremely helpful when directed at controllable items.

d.All of the above.

e.None of the above.