1. Explain how a flexible budget differs from a master budget. (2 Points)

2. What is a standard cost, and how does it differ from a budgeted cost? (2 Points)

3. How are standards established for direct materials, direct labour, and variable

manufacturing overhead? (2 points)

4. What are the advantages of budgeting? (2 points)

5. What is zero based budgeting? (2 point)

6. What is a master budget? (2 points)

7. Why do successful companies tend to use the bottom-up approach to establish a

master budget? (2 points)

8. Develop the components of a master budget. (2 points)

9. The sales budget is the starting point for the master budget. What is a sales budget, and how is it prepared? (2 points)

10. The production budget is developed next and is based on sales budget

projections. What is a production budget, and how is it prepared? (2 points)