a. It facilitates the coordination of activities
b. It provides definite objectives for evaluating performance
c. It provides assurance that the company will achieve its objectives
d. It requires all levels of management to plan ahead on a recurring basis
2. Budgeting is usually most closely associated with which management function?
3. The starting point in preparing a master budget is the preparation of the
a. production budget
b. sales budget
c. purchasing budget
d. personnel budget
4. Which one of the following items would never appear on a cash budget?
a. Office salaries expense
b. Interest expense
c. Depreciation expense
d. Travel expense
5. Which of the following is true about variable costs:
a. Variable costs are constant in total even when activity levels change.
b. Variable costs are fixed in total but vary on a per unit basis.
c. Variable costs on a per-unit basis have an inverse relationship.
d. Variable costs vary in total but are fixed per unit.
e. All of the above.
6. Which of the following is true about the firm's margin of safety?
It is the excess of expected sales over the break even sales level.
It is the amount by which the sales of a company can drop before the company incurs a loss.
It can be expressed in units, dollars, or as a percentage of sales.
All of the above.
None of the above.
7. The basic difference between a static budget and a flexible budget is that:
a. A flexible budget considers only variable costs, but a static budget considers all costs. b. Flexible budgets allow management latitude in meeting goals, whereas a static budget is based on a fixed...