1- The first step in preparing a flexible budget is to

a. identify the fixed and variable cost components.

b. prepare the budget for each activity level by multiplyingeach variable cost per unit by the activity level and then addingthe fixed costs.

c. identify the relevant activity levels.

d. None of these choices are correct.

2- All of the following are integrated into the cost of goodssold budget except the __________ budget.

a. direct labor cost

b. direct materials purchases

c. factory overhead cost

d. selling and administrative expenses

3- The __________ is often used as the starting point for theselling and administrative expenses budget.

a. sales budget

b. factory overhead cost budget

c. payroll register

d. cost of goods sold budget