25. A flexible budget is one (a) Prepared for several possible levels of sales revenue (b) That can be changed by a general manager after preparation by a department (c) That is not part of the master budget (d) That includes only variable costs 26. If restaurant has budgeted 1,000 customers at an average check of $9.00 and actual customers were 800 with an actual average check of $9.50, then (a) Actual sales revenue will be higher than budgeted (b) We can assume that the higher average check is keeping customers away (c) The cause of a significant difference between actual and budgeted figures should be investigated (d) Because of slower service fewer customers could be served 27. A restaurant has 125 seats with an average check of $8.00 and a daily seat turnover of 2.5 It is open 5 days a week and the average check is forecast to increase by 10% in the next year. Next year's budgeted sales revenue will be (a) $286,000 (b) $650,000 (c) $715,000 (d) S 13,750 28. A banquet department's annual budgeted sales revenue was based on 45,000 guests at an average check of $10.00. Actual figures were 47,500 guests at a $9.50 average check. The total budget, price, and sales volume variances respectively are (a) $1,250 Unfavorable, $23,750 Unfavorable, and $22,500 Favorable (b) $1,250 Favorable, $2,750 Favorable, $1,500 Unfavorable (c) $1,250 Favorable, $23,750 Unfavorable, $25,000 Favorable (d) $1,250 Favorable, $23,750 Favorable, and $25,000 Unfavorable 29. Short-term budgets differ from long-term budgets in that a short-term budget (a) Is for a day, week, or month and a long-term one is for six months or a year (b) Is expressed in monetary terms where a long-term budget is generally expressed in the number of customers or some other measure (c) Is usually for a year or less and long-term budgets are in excess of a year (d) Is prepared by an accountant and a long-term budget is prepared by a manager 30. In using the CVP equation, the sales level required in units to breakeven is determined by dividing (a) Fixed costs by contribution margin in dollars (b) Fixed costs plus operating income by 100% minus the variable cost percentage (c) Fixed costs plus net income by the contribution margin percent (d) The sales level in dollars by unit variable cost 19, A restaurant has a food operation with a 30% variable cost and a bar operation with a 25% variable cost. The food operation produces 60% of total sales revenue and the bar 40%. If the restaurant wanted an extra $7,500 in operating income, by how much would sales revenue have to increase to provide this added profit? (a) $26,786 (b) $23,810 (c) $10,417 (d) $10,714 20. Sales revenue is $250,000, fixed costs are $90,000, profit is $50,000, and sales price per unit is $25.00. Variable cost per unit is (a) $11.00 (b) $15.00 (c) $20.00 (d) $25.00 21. If a company has an income of $5,000 (after depreciation but before income tax) during a particular month, its bank account should have increased by: (a) $5,000, plus depreciation, plus tax (b) $5,000, plus depreciation (c) $5,000, less income tax (d) Probably some amount other than any of the above 22. In cash budgeting, depreciation expense on the income statement is not shown as a cash disbursement on a cash budget because (a) One has a choice of depreciation methods (b) Depreciation is not really a business expense (c) The recording of depreciation expense does not require an outlay of cash (d) Depreciation is only shown as an expense to reduce cash outflow from tax 23. Sales revenue in Month 1 of a new restaurant is forecast to be $60,000 and in Month 2 $75,000. Cost of sales is estimated to be 30% of sales revenue, with half the cost paid for in the month of purchase, the other half in the following month. Month 2's cash disbursement for purchases is (a) $20,250 (b) $18,000 (c) $22,500 (d) $11,250 24. A bank lockbox is used to (a) Avoid having to use bank float (b) Avoid having to use concentration banking (c) Speed up payment of accounts payable (d) Speed up collection of accounts receivable