Chapter 8 11. The flexible budget formula is an equation that determines budgete

Question

Chapter 8

11. The flexible budget formula is an equation that determines budgeted costs for any level of output.

a. True

b. False

12. Flexible budgets are also called static budgets.

a. True

b. False

13. A flexible budget is a summary of expected costs for a range of activity levels and is geared to changes in the level of productive output.

  a. True

b. False

14. The static budget can be adjusted automatically for changes in the level of output.

  a. True

b. False

15. The direct materials price standard is a carefully derived estimate of what a particular type of direct material will cost when purchased during the next accounting period.

a. True

b. False

Explanation / Answer

Answer:11 True

Because The variable cost per unit and total fixed costs are components of the flexible budget formula, an equation that can be used to determine the expected, or budgeted, cost for any level of output. The formula is as follows: (Variable Cost per Unit × Number of Units Produced) + Budgeted Fixed Costs = Total Budgeted Costs.

Answer:12 false because static budget is fixed budget.

Answer:13 True

Because it is defination of flexible budget.

Answer:14 False

Answer:15 True

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