4) The direct materials budget is prepared using information from the budget. A) cash B) master C) capital expenditure D) production 5) An intentional understatement of expected revenues or overstatement of expected expenses by managers to have a favorable performance evaluation is known as A) benchmarking B) appropriation C) budgetary slack D) variance analysis 6) Which of the following statements is true of the operating budget? A) It includes the budgeted income statement. B) It includes the capital expenditures budget. C) It includes the direct labor budget. D) It includes the cash budget. 7) In the cash flow statement, all cash receipts and payments are categorized into Operating activities. Financing activities, and A) merchandising activities B) budgeting activities C) investing activities D) controlling activities 8) Which of the following would NOT appear on the selling and administrative budget of O Dell Company? A) Office rent Expense B) Depreciation Expense C) Salaries Expense D) Indirect Labor Managerial Accounting-Exam 3 (Summer 2018)