J K L M N O 42 Answer: 44 5. Which of the following is not an advantage of the master budget? 45 a) uncover potential bottlenecks before they occur 46b ) define goals and objectives to use in benchmarking the future 47 c) accurately predicting every transaction for the period 48 d) allocate resources effectively 49 Answer: C 51 6. How are revenue/spending variances calculated? 52 a) actual activity at actual rates vs. actual activity at budgeted rates 53 b) planned activity at budgeted rates vs. actual activity at budgeted rates 54 planning budget vs. actual results 55 d) differences in activity levels from one month to the next 36 Answer 58 This is one line from Michael Scott Paper Company's Flexible Budget Performance Report 59 Use it to complete problems 10 and 11. Actual Revenue and flexible Activity Planning Results Spending Variance Budget Variance Budget 61 Reams of paper 822 822 800 2 Revenue (1459) $38,990 K $36.990 y $36.000 10 7. What is x? a) $2,000 favorable b) $2,000 unfavorable $2.990 unfavorable d) $2,990 favorable 9 Answer 8. What is y? a) 3990 favorable b) 22 favorable c) 9990 unfavorable d) 22 unfavorable Answer: 16 9. True or false standards are used to help break down spending variances into two categories price variances and Multiple Choice Short Answer Page 2 Page 3 Page 4 +