Identify each statement as true or false , indicate how to correct the statement.

Standard cost is the industry average cost for a product or service.

A sales budget should be prepared before the production budget.

A merchandiser has a merchandise purchases budget, and a manufacturer has a materials purchases budget. Evaluating a manager's performance in controlling variable costs is effectively achieved using a static budget.

The learning and growth perspective on the balanced scorecard includes measures monitoring product development, production, delivery, and after-sale service.

Companies can use either a predetermined overhead rate or a manufacturing overhead budget.

A standard is a unit amount, whereas a budget is a total amount.

Management by exception means that management will investigate all areas where actual results are greater than planned results.

A materials quantity variance is calculated as the difference between the standard direct materials price and the actual direct materials price multiplied by the actual quantity of direct materials used.

The activity index used in preparing a flexible budget should be the basis of the variable costs that are being budgeted.