select the best answer (Worth 10%)

1. Standards differ from budgets in that

a) budgets but not standards may be used in valuing inventories

b) budgets but not standards may be journalized and posted

c) budgets are a total amount and standards are a unit amount

d) only budgets contribute to management planning and control

2. the first step in preparing a manufacturing company's master budget is preparing the

a) sales budget b) cash budget c) sales forecast d) production budget

3. the direct labor budget and the manufacturing overhead budget are derived from the

a) budgeted income statement b) cash budget c) production budget d) sales budget

4. The total kilograms of direct materials needed for production is 10000. If the beginning inventory is 2200 kg and the desire ending inventory is 1000 kg, the total direct material that must be purchased is

a) 8800 kg b) 11200 kg c) 10000 kg d) 11000kg

5. The operating budget includes all of the following supporting budgets except for

a) the selling and administrative expenses budget b) the production budget

c) the direct labor budget d) the cash budget

6. Expected direct materials purchases in ABC Company are $70,000 in the first quarter and $90,000 in the second quarter. Forty percent of the purchases are paid in cash as incurred, and the rest is paid in the following quarter. The budgeted cash payments for purchases in the second quarter are

a) $90,000 b) $82,000 c) $78,000 d) $70,000

7. In the static budget, the budgeted variable selling and administrative expenses were $10,000 for budgeted sales of 100,000 units. At the end of the period the actual costs were $9,900 for actual sales of 105,000 units. The flexible budget price variance is

a) $100 unfavorable b) $100 favorable c) $600 favorable d) $600 unfavorable