Budgetary slack exists when a manager deliberately underestimates revenues or overestimates costs in an effort to make the future period appear less attractive in the budget than they think it will be in reality. A) True B) False. 12. To prepare the ending finished goods inventory budget, the unit cost of producing finished goods must be calculated by using information from the sales and cash budgets. A) True. B) False. 3.The selling and administrative expenses budget outlines planned expenditures for both manufacturing and nonmanufacturing activities. A) True. B) False. 14. Typically, the master budget is for a one-year period, corresponding to the fiscal year of the company. A) True. B) False. 15. Budgets should reflect operating realities such as seasonal variations and general economic trends. A) True. B) False. 16. In an overhead budget: A) Only the variable overhead rate is included. B) Both budgeted variable and fixed overhead costs are included. C) A separate budget is prepared for fixed overhead. D) Several activity drivers are selected E) Separate budgets are prepared for fixed overhead and for variable overhead. Which of the following budgets is NOT considered when preparing a cost of goods sold budget? A) Direct materials budget. B) Direct labor budget