question true false write t is the statement is true and 39 f 39 if the statement is 4282430
TRUE/FALSE. Write T is the statement is true and 'F' if the statement is false. A goal of the budgeting process is to communicate a consistent set of plans throughout the company. After comparing budgets with actual results, corrective action will be taken based on the differences. A flexible budget is prepared to represent different levels of sales volume. Components of the master budget are: the operating budget, the capital expenditures budget and the financial budget. The production budget determines the number of units to be produced during the period. The capital expenditures budget is prepared before the preparation of the cash budget. While calculating the cash payments for budgeted selling and administrative expenses, non-cash expenses like depreciation are also considered. A variance is the difference between an actual amount and a budgeted amount. A flexible budget summarizes revenues and expenses for various levels of salves volume within a relevant range. The difference between the expected results in the flexible budget for the actual units sold and the static budget is called the sales volume variance. A static budget presents financial data at multiple levels of sales volume. Companies use techniques like time-and-motion studies, and consult industry “best practices” when developing standards. This is referred to as benchmarking. Only unfavorable variances should be investigated, if substantial, to determine their causes.