5. A spending variance is the difference between the amount of the cost in the static planning budget and the amount of the cost in the flexible budget. a) True b) False 6. A revenue variance is the difference between what the total sales revenue should be given the actual level of activity of the period, and the actual total sales revenue. a) True b) False Multiple choice (3 points each) 7. The usual starting point for a master budget is: a) the direct materials purchase budget. b) the budgeted income statement c) the sales forecast or sales budget. d) the production budget 8. When preparing a direct materials budget, the required purchases of raw materials in units equals: a) raw materials needed to meet the production schedule + desired ending inventory of raw materials - beginning inventory of raw materials. b) raw materials needed to meet the production schedule - desired ending inventory of raw materials - beginning inventory of raw materials. c) raw materials needed to meet the production schedule - desired ending inventory of raw materials + beginning inventory of raw materials. d) raw materials needed to meet the production schedule + desired ending inventory of raw materials + beginning inventory of raw materials