1) At the beginning of the period, the Cutting Department budgeted direct labor of $155,000, direct material of $165,000 and fixed factory overhead of $15,000 for 9,000 hours of production. The department actually completed 10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting.
a. $368,889
b. $335,000
c. $416,000
d. $370,556
2) At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct material of $170,000 and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed 10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting.
a. $378,000
b. $350,000
c. $288,000
d. $305,000
3) A disadvantage of static budgets is that they:
a. do not show possible changes in underlying activity levels
b. show the expected results of a responsibility center for several levels of activity
c. start with a clean slate
d. cannot be used by service companies
4)The process of developing budget estimates by requiring all levels of management to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as:
a. continuous budgeting
b. flexible budgeting
c. zero-based budgeting
d. master budgeting
5) A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed:
a. zero-based budgeting
b. master budgeting
c. flexible budgeting
d. continuous budgeting