1. The master budget process usually begins with the

a. Production Budget. c. Financial Budget.

b. Operating Budget d. Sales Budget. (cma)

2. In a master budget plan, sales forecast is under

a. Financial budget. c. Performance budget.

b. Operating budget. d. Capital budget.(rpcpa)

3. The most common method used in sales forecasting which makes use of the cause and effect relationship between the company sales and some outside economic factor is the
   1. Correlation analysis.
   2. Industry trend analysis.
   3. Sales force composite method.
   4. Executive opinion method. (rpcpa)

4. All of the following are considered operating budgets except the a. Cash Budget. c. Production Budget.

b. Materials Budget. d. Capital Budget. (cma)

5. The difference between the actual amounts and flexible budget amounts for the actual output achieved is the

1. Flexible budget variance.
2. Sales volume variance
   1. Production volume variance.
3. Standard cost variance. (cma)

6. Which one of the ff. statements regarding the difference between a flexible budget and a static budget is true?

1. A flexible budget provides cost allowances for different levels of activity, whereas a static budget provides costs for one level of activity.
2. A flexible budget includes only variable costs whereas a static budget includes only fixed costs.
3. A flexible budget primarily is prepared for planning purposes, whereas a static budget is prepared for performance evaluation.
4. Variances will always be larger with a flexible budget than with a static budget. (cma)

Answer the following and explain the answer!