Identify each statement as True or False, indicate how to correct the statement.

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

2- A sales budget should be prepared before the production budget.

3- A merchandiser has a merchandise purchases budget, and a manufacturer has a materials purchases budget.

4- Evaluating a manager's performance in controlling variable costs is effectively achieved using a static budget.

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

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

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

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

9- 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.

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