Instructions:?In the Answers column, place the letter from the list below that identifies the term that best matches the statement. No letter should be used more than once.

a. Budget slack

h. Theoretical capacity

p. Participative budgeting
 

b. Static budget

i. Step costs

q. Capital expenditures
 

c. Cash budget

j. Operating budgets budget
 

d. Variable costs

k. Flexible budget

r. Practical capacity
 

e. Fixed costs

l. Normal capacity
 

f. Sales budget

m. Production budget
 

g. Budgeted income

n. Financial budgets
statement

o. Cost of goods sold budget

_____  1. They include components of the pro forma financial statements such as the sales and production budgets.

_____    2.   This is prepared for a single level of volume based on management's best estimate of the upcoming level of sales and production.        

_____    3.   These tend to remain the same in dollar amount through a certain range of activity but increase when production exceeds certain limits.

_____    4.   This summarizes the data from all other budgets and enables management to determine the impact of all budget estimates on profit.

_____    5.   Management must use this budget as a basis for planning all other budgets.

_____    6.   This includes the estimated costs of materials, labor, and factory overhead as well as estimates of beginning and ending inventories of work in process and finished goods.

_____    7.   This shows the anticipated flow of cash and the timing of receipts and disbursements based upon projected revenues, the production schedule, and expenses.

_____    8.   They include the pro forma financial statements as well as the cash and capital expenditure budgets.

 _____   9.   This is a plan for the timing of acquisition of buildings, equipment, or other significant assets.

_____  10.   By using this, management quickly can determine variances by comparing actual costs with what the costs of production should have been for the level achieved.

_____  11.   Costs that do not change as production changes over a given range.

_____  12.   These change in total dollar amount in proportion to changes in activity and include direct labor and direct materials.

_____  13.   This represents the maximum number of units that can be produced with the completely efficient use of all available facilities and personnel.

_____  14.   This is the level of production that provides complete utilization of facilities and personnel but allows for some idle capacity due to operating interruptions.

_____  15.   This level of capacity does not involve a plan for maximum usage of operating facilities but allows for some unavoidable idle capacity and inefficiencies in operations.

_____  16.   Process where managers closest to the situation make projections that are then reviewed by their superiors.

_____  17.   Where a manager sets unrealistically low goals in an effort to make only average performance look good.

_____  18.   This is computed as follows:  Number of units to be sold, plus the desired number of units in finished goods inventory, less the number of units in finished goods inventory on hand at the beginning of the period.