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True or False The production budget begins with the budgeted sales in units from the sales budget. In the merchandise purchases budget, the required purchases

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The production budget begins with the budgeted sales in units from the sales budget. In the merchandise purchases budget, the required purchases (in units) for a period can be determined by subtracting the beginning merchandise inventory (in units) from the budgeted sales (in units) and substracting desired ending merchandise inventory (in units). Fixed costs should not be included in a flexible budget because they do not change when the level of activity changes. The activity variance for revenue is favorable if the revenue in the flexible budget exceeds the revenue in the static planning budget

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