Question 1: The primary objective of budgeting is to create a detailed plan that guides managers in the acquisition and use of an organization's resources.
a. True
b. False
Question 2: The primary objective of budgeting is to create a detailed plan that guides managers in the acquisition and use of an organization's resources.
a. True
b. False
Question 3: CVP analysis is a tool managers use to prepare the operating expense budget.
a. True
b. False
Question 4: All costs will vary in proportion to various levels of sales.
a. True
b. False
Question 5: The contribution margin income statement emphasizes CVP relationships.
a. True
b. False
Question 6: Percentage change between years is calculated as the amount of the change divided by the base-year amount.
a. True
b. False
Question 7: Ratio analysis is used to evaluate the reasonableness of budget assumptions.
a. True
b. False
Question 8: The current ratio measures liquidity.
a. True
b. False
Question 9: There are two types of variable cost variances: volume variances and price variances.
a. True
b. False
Question 10: All variances should be investigated.
a. True
b. False