A. program budgeting C.

zero-based budgeting
B. line budgeting D. flexible budgeting

28. A static budget is not appropriate in evaluating a manager's effectiveness if a company has
A. substantial fixed costs.
B. substantial variable costs.
C. planned activity levels that match actual activity levels.
D. no variable costs.

45. Flexible budgeting is a reporting system wherein the

A. Budget standards may be adjusted at management’s discretion.
B. Planned level of activity is adjusted to the actual level of activity before the performance report is
prepared.
C. Reporting dates vary according to the managerial levels of the users.
D. Packages of activities vary from period to period.

15. A budget that presents the plan for a range of activity so that the plan can be adjusted for changes in activity
levels is referred to as:
A. Zero-based budgeting.
B. Continuous budgeting.
C. Flexible budgeting.
D. Program planning and budgeting system.

16. A flexible budget is

A. one that can be changed whenever a manager so desires
B. adjusted to reflect expected costs at the actual level of activity
C. one that uses the formula total costs = cost per unit x units produced
D. the same as a continuous budget

26. A series of budgets for varying levels of activity is a:

A. Variable cost budget. C. Master budget.
B. Flexible budget. D. Zero-based budget.

48. If a company wishes to establish a factory overhead budget system in which estimated costs can be derived
directly from estimates of activity levels, it should prepare a
A. flexible budget. C. Discretionary budget.
B. Program budget. D. Manufacturing budget.

46. The basic difference between a master budget and a flexible budget is that a
A. Flexible budget considers only variable costs but a master budget considers all costs.
B. Flexible budget allows management latitude in meeting goals whereas a master budget is based on a
fixed standard.
C. Master budget is for an entire production facility but a flexible budget is applicable to single department only.
D. Master budget is based on one specific level of production and a flexible budget can be prepared for any
production level within a relevant range

47. Which of the following is a difference between a static budget and a flexible budgets?
A. A flexible budget includes only variable costs; a static budget includes only fixed costs.
B. A flexible budget includes all costs, a static budget includes only fixed costs.
C. A flexible budget gives different allowances for different levels of activity, a static budget does not.
D. There is no difference between the two.
17. A system that classifies budget requests by activity and estimates the benefits arising from each activity:
A. Incremental budgeting system.
B. Static budgeting system.
C. Program planning and budgeting system.
D. Participative system.

21. A budget that identifies revenues and costs with an individual controlling their incurrence is
A. Master budget C. Product budget
B. Responsibility budget D. None of the above

25. The difference between an individual's submitted budget projection and his or her best estimate of the item
being projected is an example of
A. padding the budget
B. adhering to zero-based budgeting assumptions
C. creating budgetary slack
D. being incongruent with participative budgeting

43. Budget slack is a condition in which

A. Demand is low at various times of the year
B. Excess machine capacity exists in some areas of the plant
C. There is an intentional overestimate of expenses or an underestimate of revenues
D. Managers grant favored employees extra time-off