1.21 1.20 Which of the following pairs of techniques use the time value of money concept? A Payback period method and the internal rate of return method B. Internal rate of return method and the accounting rate of return method C. Accounting rate of return method and the payback period method D. Internal rate of return method and the net present value method Projects with a negative net present value will always have an) A payback period longer than the useful life of the investment B. internal rate of return that is less than the required rate of return. C. accounting rate of return that is negative. D. series of cash outflows that is greater than the initial cost of the project. 1.22 Which of the following is correct concerning a budget? A. It is a formal document that quantifies a company's plans for achieving its goals. B. It is prepared by the budget committee. C. It identifies the causes of significant deviations from expected performance. D. All of the answer choices are correct. 1.23 When budgets are used for evaluation, what is the difference between budgeted and actual amounts called? A. Exceptions B. Budget variances C. Performance results D. Flexible budgets 1.24 The main difference between a static budget and a flexible budget is that the static budget is A. constructed using a top-down approach, while the flexible budget uses a bottom-up approach. B. based on units produced, while a flexible budget is based on units sold. C. for a single level of activity, while a flexible budget can be adjusted for different activity levels. D. used only for selling and administrative costs, while the flexible budget is used for manufacturing costs. 1.25 Prodigy Products' expected manufacturing costs for trash cans for the month when 3,000 cans are produced are summarized below: Direct material $2.40 per unit Direct labor $1.60 per unit Variable overhead $ 6,000 or $2 per unit Factory depreciation 10,500 Supervisory salaries 4,800 Other fixed factory costs 1,500 What is the flexible budget amount for a month when 3,200 units are produced? A. $36,000 B. $37,120 C. $34,800 D $35,600 1.26 Prodigy Products' expected manufacturing costs for trash cans for the month when 3,000 cans are produced are summarized below: Direct material $2.40 per unit Direct labor $1.60 per unit Variable overhead $ 6,000 Factory depreciation 10,500 Supervisory salaries 4,800 Other fixed factory costs 1,500 What is the flexible budget amount for a month when 4,000 units are produced? A. $34,800 B. $38,800 C. $46,400 D. $40,800