Questions 1-5

1) The usual starting point for a master budget is: A) the budgeted income statement. B) the sales forecast or sales budget. C) the production budget. D) the direct materials purchase budget. 2) There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget? A) It details the required raw materials purchases. B) It details the required direct labor hours. C) It is calculated based on the sales budget and the desired ending inventory. D) It summarizes the costs of producing units for the budget period. 3) A budget that is based on the actual activity of a period is known as a: A) flexible budget. B) continuous budget C) static budget D) master budget 4) An unfavorable MQV indicates that: A) standard material allowed for output exceeds the actual usage of material. B) actual material price exceeds standard price. C) standard material price exceeds actual price. D) actual usage of material exceeds the standard material allowed for output 5) Variable manufacturing overhead is applied to products on the basis of standard direct labor-hours. If the labor efficiency variance is favorable, the variable overhead efficiency variance will be: A) favorable. B) zero. C) unfavorable. D) either favorable or unfavorable