T OR F ?

At the break-even point, variable expenses and fixed expenses are equal. 6) 7) The usual starting point in budgeting is to make a forecast of cash receipts and cash disbursements. When used in return on investment (ROI) calculations, turnover equals sales divided by average operating assets. 8) All other things the same, an increase in unit sales will normally result in an increase in the return on investment. 9) When reconciling variable costing and absorption costing net operating income, fixed manufacturing overhead costs deferred in inventory under absorption costing should be added to variable costing net operating income to arrive at the absorption costing net operating income. 10) Page 1 of 38 18) The production budget is typically prepared prior to the sales budget. 19) Sales forecasts are drawn up after the cash budget has been completed because only then are the funds available for marketing known. 20) Return on investment (ROI) equals margin multiplied by turnover