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Unformatted text preview: ch16 Student: ___________________________________________________________________________ 1. In essence, the terms &quot;master budget&quot; and &quot;operating budget&quot; mean the same thing and can be used interchangeably. True False 2. Variances are the difference between actual results and budgeted results. True False 3. In general, and holding all other things constant, an unfavorable variance decreases operating profits. True False 4. A favorable variance is not necessarily good, and an unfavorable variance is not necessarily bad. True False 5. The terms &quot;master budget&quot; and &quot;flexible budget&quot; mean the same thing and can be used interchangeably. True False 6. A flexible budget adjusts the static budget to reflect the actual activity level achieved during the period. True False 7. If the budgeted activity level is greater than the actual activity level, then the total budgeted costs of the master budget will be greater than the total budgeted costs of the flexible budget. True False 8. The difference between operating profits in the master budget and operating profits in the flexible budget is called a sales price variance. True False 9. The sales activity variance is the result of a difference between budgeted units sold and actual units sold. True False 10. The sales price variance is the actual selling price per unit times the difference between budgeted number of units and the actual number of units sold. True False 11. Production cost variances are input variances, while sales activity variances are output variances. True False 12. The flexible and master budget amounts are the same for fixed marketing and administrative costs. True False 13. The standard cost for a unit of output is the standard price per unit of input times the standard number of inputs per one unit of output. True False 14. Both the actual material used and the standard quantity allowed for material is based on the actual output attained. True False 15. It is possible to have a favorable direct material price variance and an unfavorable direct material efficiency variance. True False 16. In setting standards, allowances usually include normal inefficiencies (e.g., defects in the direct material, inexperienced workers, and coffee breaks). True False 17. The direct labor efficiency variance can be the result of poor supervision or poor scheduling by divisional managers. True False 18. Variance analysis for fixed production costs is virtually the same as for variable production costs. True False 19. The budget (or spending) variance for fixed production costs is the difference between the actual fixed costs and the budgeted fixed costs on the master budget. True False 20. The production volume variance is the difference between fixed costs on the flexible budget and the fixed costs on the master budget. True False 21. Which of the following statements is (are) true?...
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This note was uploaded on 07/10/2011 for the course ECON 1001 taught by Professor Cock during the Spring '11 term at Virginia Tech.
- Spring '11