71.A disadvantage of static budgets is that they
a.are dependent on previous year's actual results
b.cannot be used by service companies
c.do not show possible changes in underlying activity levels
d.show the expected results of a responsibility center for several levels of activity
72.A series of budgets for varying rates of activity is termed a(n)
a.flexible budget
b.variable budget
c.master budget
d.activity budget
73.Chelsa Manufacturing Co.'s static budget at 5,000 units of production includes $40,000 for direct labor and $5,000for variable electric power. Total fixed costs are $23,000. At 8,000 units of production, a flexible budget wouldshow
a.variable costs of $64,000, and $28,000 of fixed costs
b.variable costs of $64,000, and $23,000 of fixed costs
c.variable costs of $72,000, and $23,000 of fixed costs
d.variable and fixed costs totaling $107,000
74.Laurie Inc.’s static budget for 10,000 units of production includes $60,000 for direct materials, $44,000 for directlabor, fixed utilities costs of $5,000, and supervisor salaries of $25,000. A flexible budget for 12,000 units ofproduction would show
a.the same cost structure in total
b.direct materials of $72,000, direct labor of $52,800, fixed utilities of $5,000, and supervisor salaries of $25,000
c.total variable costs of $159,800
d.direct materials of $60,000, direct labor of $52,800, fixed utilities of $6,000, and supervisor salaries of $25,000
75.The primary difference between a static budget and a flexible budget is that a static budget
a.is suitable in volatile demand situation while flexible budget is suitable in a stable demand situation
b.is concerned only with future acquisitions of fixed assets, whereas a flexible budget is concerned withexpenses that vary with sales
c.includes only fixed costs, whereas a flexible budget includes only variable costs
d.is a plan for a single level of production, whereas a flexible budget can be converted to any level ofproduction
76.If budgeted beginning inventory is $8,000, budgeted ending inventory is $9,400, and budgeted cost of goods sold is
$10,260, budgeted production should be
a. $1,400
b. $9,600
c. $11,660
d. $11,550
77.At the beginning of the period, the Cutting Department budgeted direct labor of $155,000, direct materials of$165,000, and fixed factory overhead of $15,000 for 9,000 hours of production. The department actually completed10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexiblebudgeting?
a. $416,000
b. $370,556
c. $368,889
d. $335,000
78.At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct materials of$170,000, and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexiblebudgeting?
a. $288,000
b. $305,000
c. $350,000
d. $378,000
79.The production budgets are used to prepare which of the following budgets?
a.operating expenses
b.direct materials purchases, direct labor cost, and factory overhead cost
c.sales in dollars
d.sales in units
80.Principal components of a master budget include
a.production budget
b.sales budget
c.capital expenditures budget
d.all of these