The cash budget is developed from the budgeted income statement.

The cash budget is developed from the budgeted income statement. 

a. True
b. False


Answer: B

If the actual level of activity is 4% more than planned, then the fixed costs in the static budget should be increased by 4% before comparing them to actual costs.

If the actual level of activity is 4% more than planned, then the fixed costs in the static budget should be increased by 4% before comparing them to actual costs. 

a. True
b. False



Answer: B

If the actual level of activity is 4% less than planned, then the costs in the static budget should be reduced by 4% before comparing them to actual costs.

If the actual level of activity is 4% less than planned, then the costs in the static budget should be reduced by 4% before comparing them to actual costs. 

a. True
b. False



Answer: B

A static planning budget is suitable for planning and for evaluating how well costs are controlled.

A static planning budget is suitable for planning and for evaluating how well costs are controlled. 

a. True
b. False


Answer: B

It may be easier to control fixed costs than variable costs.

It may be easier to control fixed costs than variable costs. 

a. True
b. False


Answer: A

A flexible budget performance report should contain fixed as well as variable and mixed.

A flexible budget performance report should contain fixed as well as variable and mixed.

a. True
b. False


Answer: A