The following statements are based upon your knowledge of the budgeting process. Please check only those answers that are TRUE.

CHECK ALL THAT APPLY:

a) If the actual cost incurred for the Theatre's rent is greater than the amount in the flexible budget, the variance is unfavorable.If the actual cost incurred for the Theatre's rent is greater than the amount in the flexible budget, the variance is unfavorable.

b) The number of cost drivers used to prepare a budget is limited to three.The number of cost drivers used to prepare a budget is limited to three.

c) If a company's actual net operating income is greater than net income in the flexible budget, the total overall revenue and spending variance will be favorable.If a company's actual net operating income is greater than net income in the flexible budget, the total overall revenue and spending variance will be favorable.

d) If a variance is favorable, and significant in amount, it may be ignored.If a variance is favorable, and significant in amount, it may be ignored.