#6-9

55 6. Which information would be needed to prepare a direct materials budget? a) cash collections from sales on account 57 b) direct labor hours available 58 c) required production in units d) budgeted sales in units 60 Answer: 62 7. What type of budget considers how changes in the level of activity affect costs and revenues? a) static budget b) flexible budget c) master budget d) planning budget e) actual budget 68 Answer: 71 70 8. Which of the following is not an advantage of the master budget? a) uncover potential bottlenecks before they occur b) define goals and objectives to use in benchmarking the future c) accurately predicting every transaction for the period d) allocate resources effectively 75 Answer: 72 77 9. Which of the following is an unfavorable variance? 78 a) actual costs costs per the planning budget 80 c) actual revenue > revenue per the planning budget 81 d) none of the given choices are unfavorable variances. 82