QUESTION 17

The starting point for budgeting should be

the sales budget or forecast.

the master budget.

the cash budget, which is the lifeblood of the business.

the raw materials budget.

the production budget.

QUESTION 18

DEF is just beginning operations as a new company. The sales forecast for DEF Co for the first four months of the year is shown below.

	JAN	FEB	MAR	APR
Cash Sales	$15,000	$24,000	$18,000	$14,000
Credit Sales	$100,000	$120,000	$90,000	$70,000

Half of the credit sales are paid for in the month of the sale; 30% are paid in the month following the sale and the remainder are paid two months after the month of sale. If there are no bad debts the expected cash inflow for March is:

$138,000

$122,000

$119,000

$108,000

$63,000

QUESTION 37

In accounting when performing differential analysis, relevant costs

differ among alternatives.

synonymous with variable costs.

are "material" or significant.

are assessed with statistical control charts.

all of the above.

QUESTION 38

Management by Exception and Statistical Control Charts

are useful in differential analysis.

help determine which variances to investigate.

enhance cost volume profit analysis.

are the basis of flexible performance reports.

all of the above.

QUESTION 39

Sunk costs:

cannot be recouped.

are not relevant when performing differential analysis.

are opportunity costs.

a and b.

all of the above.

QUESTION 40

If an unfavorable variance is a magnitude that is 3 standard deviations away from the mean,

		it should most likely be investigated.
		it would be considered an extremely large variance.
		it may mean an error in the standards upon which the variance was calculated.
		all of the above.
		none of the above.