9-1 A budget a. b. c. is a long-term plan. covers at least 2 years. is only a control tool. d. is a short-term financial plan. e. is necessary only for large firms 9-2 Which of the following is part of the control process? Monitoring of actual activity Comparison of actual with planned activity Taking corrective action All of these. d. a. b. c. Investigating 9-3 Which of the following is not an advantage of budgeting? It provides a standard for perform- ance evaluation. d. It forces managers to plan. b. a. It provides information for decision making. c. It guarantees an improvement in It improves communication and coordination e. organizational efficiency 9-4 The budget committee a. reviews the budget. b. resolves differences that arise as the c. d. e. approves the final budget. is directed (typically) by the controller. does all of these. budget is prepared. 9-5 A moving, 12-month budget that is updated monthly is a. not used by manufacturing firms. b. a waste of time and effort. c. a master budget. d. e. a continuous budget. always used by firms that prepare a master budget. 9-6 Which of the following is not part of the operating budget? a. b. c. The direct labor budget The cost of goods sold budget The production budget d. e. The capital budget The selling and administrative expenses budget 9-7 Before a direct materials purchases budget can be prepared, you should first prepare a sales budget. prepare a production budget. decide on the desired ending inven- tory of materials. obtain the expected price of each type of material. do all of these. d. a. b. c. e. 9-8 The first step in preparing the sales budget is to prepare a sales forecast. review the production budget carefully assess the desired ending inventory of finished goods. talk with past customers. increase sales beyond the forecast level. a. d. e. b. c