TRUE OR FALSE

1. A static budget is changed only when actual activity is different from the level of activity expected.
2. A flexible budget is a series of static budgets at different levels of activities.
3. Flexible budgeting relies on the assumption that unit variable costs will remain constant within the relevant range of activity.
4. Management by exception means that management will investigate areas where actual results differ from planned results if the items are material and controllable.
5. A distinction should be made between controllable and noncontrollable costs when reporting information under responsibility accounting.
6. More costs become controllable as one moves down to each lower level of managerial responsibility.
7. Budget reports provide the feedback needed by management to see whether actual operations are on course.
8. A static budget is an effective means to evaluate a manager's ability to control costs, regardless of the actual activity level.
9. The flexible budget report evaluates a manager's performance in two areas: (1) production and (2) costs.
10. If actual results are different from planned results, the difference must always be investigated by management to achieve effective budgetary control.
11. In a responsibility accounting reporting system, as one moves up each level of responsibility in an organization, the responsibility reports become more summarized and show less detailed information.