QUESTION $1(10$ marks; $18$ minutes$)$

Identify each item as an advantage or disadvantage of budgeting.

$1\mathrm{.}1$ Pseudoparticipation

$(1)$

$1\mathrm{.}2$ Forces managers to plan

$(1)$

$1\mathrm{.}3$ Improves communication and coordination

$(1)$

$1\mathrm{.}4$ Leads to budgetary slack

$(1)$

$1\mathrm{.}5$ Provides standard for performance evaluation

$(1)$

Identify each item as a component of the production budget or the direct materials purchases budget.

$1\mathrm{.}6$ Beginning inventory of materials

$(1)$

$1\mathrm{.}7$ Sales in units

$(1)$

$1\mathrm{.}8$ Units of raw materials needed for each unit of product

$(1)$

$1\mathrm{.}9$ Ending inventory of product

$(1)$

$1\mathrm{.}10$ Desired ending inventory

$(1)$