50.1K

Verified Solution

Link Copied!

1.A flexible budget performance report contains activity variances but not revenue or spending variances.

True False

2.When reconciling variable costing and absorption costing net operating income, fixed manufacturing overhead costs deferred in inventory under absorption costing should be deducted from variable costing net operating income to arrive at the absorption costing net operating income.

True False

3.The selling and administrative budget is typically prepared before the cash budget. True False

4.The internal rate of return method assumes that the cash flows generated by the project are immediately reinvested elsewhere at a rate of return that equals the companys cost of capital.

True False

5.All other things the same, if long-term debt is exchanged for short-term debt, the debt-to-equity ratio will be unchanged.

True False

6.If demand is insufficient to keep everyone busy and workers are not laid off, an unfavorable (U) variable overhead efficiency variance often will be a result unless managers build excessive inventories.

True False

7.A revenue variance is unfavorable if the revenue in the static planning budget is less than the revenue in the flexible budget.

True False

8.When computing the break even for a segment, the calculations include the companys common fixed expenses.

True False

Answer & Explanation Solved by verified expert

See Answer