Calculation of budgeted production dollars.

1. Budgeting supports the planning process by encouraging all of the following activities EXCEPT ________.

a) Requiring all organizational units to establish their goals for the upcoming period

b) Increasing the motivation of managers and employees by providing agreed-upon expectations

c) Directing and coordinating operations during the period

d) Improving overall decision making by considering all viewpoints, options, and cost reduction possibilities

2. McCabe Manufacturing Co.'s static budget at 8,000 units of production includes $40,000 for direct labour and $4,000 for electric power. Total fixed costs are $23,000. At 9,000 units of production, a flexible budget would show ________.

a) variable costs of $49,500 and $25,875 of fixed costs

b) Variable costs of $44,000 and $23,000 of fixed costs

c) Variable costs of $49,500 and $23,000 of fixed costs

d) Variable and fixed costs totalling $75,375

3. At the beginning of the period, the Cutting Department budgeted direct labour of $135,000, direct material of $165,000 and fixed factory overhead of $12,000 for 7,500 hours of production. The department actually completed 10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting?

a) $416,000

b) $412,000

c) $367,000

d) $357,000