Question

1)The flexible budget variance:

		a.removes any differences between budgeted operating income and actual income that are attributable to differences in budgeted and actual volume.
b.		directs management’s attention to specific reasons for why budgeted income differed from actual income.
c.		compares the static budget to the flexible budget.
	d.	is most often used to determine whether or not there is sufficient demand for a company’s product.

2 )Which of the following is not a consideration in the preparation of a sales budget or sales forecast?

	a.	Issuance of the current year’s financial statements
	b.	General economic trends
	c.	Anticipated marketing or advertising plans
	d.	Anticipated price changes in both purchasing costs and sales prices

Answer 1