True/False Circle the letter for the best answer for each question 1. The production budget is typically prepared prior to the sales budget. A) True B) False Both planning and control are needed for an effective budgeting system. A) True B) False A flexible budget can be used to determine what costs should have been at a given level of activity. A) True B) False 4. A spending variance is the difference between how much a cost should have been, given the actual level of activity, and the actual amount of the cost for the period. A) True B) False The materials price variance is computed by multiplying the difference between the actual price and the standard price by the actual quantity of materials used in production. A) True B) False The standard cost per unit is computed by multiplying the standard quantity or hours by the standard price or rate. A) True B) False