31 The two benefits of budgeting are:

Budgets provide less financial security and a higher likelihood of going into debt

Budgets can create competition for resources and politics

Budgets are applied mechanically and rigidly

Budgets provide a more detailed picture of what goals need to be accomplished and can be compared to actual amounts

32 What items should be included when determining the full cost of a service?

Fixed overhead costs

All of the choices listed

Material costs

Variable overhead costs

Direct labour costs

33 The sales budget forecasts:

The company's short-term and long-term credit needs

The expected revenue for a given period

A comprehensive analysis on all aspects of operations

The quantity of inventory that needs to be purchased

34 Opportunity cost is the value of choosing the next-best alternative.

Select one:

True

False

35 Present value refers to the interest rate that is applied to the initial investment.

Select one:

True

False

36 In capital budgeting one of the advantages of a cash payback method is:

The shorter the payback period, the better the investment is

It is the rate of return that owners or investors expect

It increases the value that an asset can be sold for

It reduces the company's required level of risk

37 The sales budget, purchases budget and operating expenses budget are used to create the budgeted income statement of a Hospitality company.

Select one:

True

False

38 Bottom-up budgeting:

Is where all the budgeted figures aredetermined by upper management and imposed throughout the organization

Is the budgeted income statement and budgeted balancesheet

Involves managers from all levels of the organization participating in the creation of the budget

Is the tendency of employees to intentionally underestimate revenues and overestimate expenses

39 The budgeted quantity is used in the static budget.

Select one:

True

False

40 Differential cost is the difference in total costs between two choices.

Select one:

True

False