A budget that is established at the beginning of the period and not adjusted for different levels of actual sales activity is called a:

Select one:

a. flexible budget.

b. static budget.

c. nonfinancial budget.

d. zero-based budget.

Carlton Corporation Carlton Corporation produces and sells faux-leather handbags. In the current year, the company budgeted for the production and sale of 1,000 handbags; however, 900 handbags were actually produced and sold. Each bag has a standard requiring two yards of material at a cost of $4.00 per yard and 1 hour of assembly time at a cost of $9.50 per hour. Actual costs for the production of 900 bags were $7,215 for materials (1,850 yards purchased and used @ $3.90 per yard) and $10,125 for labor (1,125 hours @ $9.00 per hour). Refer to the Carlton Corporation information above. Carlton's direct labor rate variance is:

Select one:

a. $562.50 F.

b. $450.00 F.

c. $450.00 U.

Managers who properly apply the concept of "management by exception" will:

Select one:

a. always investigate unfavorable and favorable variances regardless of size.

b. investigate only unfavorable variances.

c. investigate only variances of a certain size or scope.

Robusto Coffee Traders Inc. sells prepackaged coffees to a variety of businesses throughout the East Coast. Robusto purchases the coffee in bulk from a wholesale distributor and packages the coffee themselves to sell to customers. The company expects to sell 120,000 and 135,000 one-pound packages of coffee during 2012 and 2013, respectively. The company had 6,000 one-pound packages on hand at the beginning of 2012, and the company has a policy of maintaining an ending inventory equal to 5 percent of the packages needed for next year's expected sales. How many packages of coffee should the company plan to purchase in 2012?

Select one:

a. 255,000

b. 120,750

d. 119,250

Which of the following equations best depicts a basic production budget?

Select one:

a. Required production = Projected sales + Desired ending inventory - Beginning inventory

b. Required production = Projected sales - Desired ending inventory - Beginning inventory

d. Required production = Projected sales + Desired ending inventory + Beginning inventory