The most common budget period is a. one month. b. three months. (c) six months. one year. What is budgetary control? Another name for a flexible budget b. The degree to which the CFO controls the budget C. The use of budgets in controlling operations d. The process of providing information on budget differences to lower level ma 5. On the basis of the budget reports, a. b. management analyzes differences between actual and planned results. management may take corrective action. management may modify the future plans. All of these answers are correct. C. d. 6. A static budget a. should not be prepared in a company. b. is useful in evaluating a manager's performance by comparing actual variab planned variable costs. C. shows planned results at the original budgeted activity level. d. is changed only if the actual level of activity is different than originally buc 7. The flexible budget a. is prepared before the master budget. b. is relevant both within and outside the relevant range. C. eliminates the need for a master budget. d. is a series of static budgets at different levels of activity. 8. Which responsibility centers generate both revenues and costs? a. Investment and profit centers b. Profit and cost centers C. Cost and investment centers d. Only profit centers 9. A measure frequently used to evaluate the performance of the manager of an in- is a. the amount of profit generated. b. the rate of return on funds invested in the center. c. the percentage increase in profit over the previous year. d. departmental gross profit. 10. A measure frequently used to evaluate the performance of the manager of an is a. the amount of profit generated. b. the rate of return on funds invested in the center. c. the percentage increase in profit over the previous year. d. departmental gross profit. 2 3. 4