Essay Questions 123.Indicate whether each of the following statements is true or false. A flexible budget can be viewed as an extension of a company's master budget. The master budget is a static...

Essay Questions

123.Indicate whether each of the following statements is true or false.


A flexible budget can be viewed as an extension of a company's master budget.
The master budget is a static budget because it is prepared for a single level of volume.
Standards are established for a company's costs but not for the selling prices of its goods and services.
If rent is budgeted at $34,000 for 10,000 units, rent would also be budgeted at $34,000 for 11,000 units.
Flexible and static budgets use the same per-unit standard amounts for sales and variable costs.
124.Indicate whether each of the following statements is true or false.


A variance is a difference between an expected amount and a standard amount.
When actual sales revenue exceeds the expected revenue, a company has a favorable sales variance.
A cost variance is considered to be unfavorable when actual costs are less than standard costs.
A company can calculate variances for both revenues and costs.
Flexible budgets can be used for planning, but not for performance evaluation.