Student name:

MULTIPLE CHOICE $-$ Choose the one alternative that best completes the statement or

answers the question.

An operating budget would not include a:

A$)$ cash budget.

B$)$ sales budget.

C$)$ labor budget.

D$)$ production budget.

The purpose of the flexible budget is to:

A$)$ allow management some latitude in meeting goals.

B$)$ eliminate cyclical fluctuations in production reports by ignoring variable costs.

C$)$ compare actual and budgeted results at virtually any level of production.

D$)$ reduce the total time in preparing the annual budget.

When using a flexible budget, what will happen to variable costs on a per$-$unit basis as

production increases within the relevant range?

A$)$ Decrease

B$)$ Increase

C$)$ Remain unchanged

D$)$ Variable costs are not considered in flexible budgeting.

In analyzing company operations, the controller of the Carson Corporation found a $$250,000$

favorable flexible budget revenue variance. The variance was calculated by comparing the

actual results with the flexible budget. This variance can be wholly explained by: $($CMA

adapted$)$

A$)$ the total flexible budget variance.

B$)$ the total static budget variance.

C$)$ changes in unit selling prices.

D$)$ changes in the number of units sold.