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85. A company developed the following per unit materials standards for its product: 3 pounds of direct materials at $4 per pound. If 12.000 units of product were produced last month and 37,500 pounds of direct materials were used, the direct materials quantity variance was A) $3,600 unfavorable. B) $6,000 unfavorable. C) $6,000 favorable. D) $3,600 favorable. 86. Which one of the following is not needed in preparing a production budget? A) Ending finished goods units B) Budgeted raw materials C) Budgeted unit sales D) Beginning finished goods units 87. Which is true of budgets? A) There is a standard form and structure for budgets. B) They are used in the planning, but not in the control, process. C) They are used in performance evaluation. D) They are voted on and approved by stockholders. 88. A common starting point in the budgeting process is A) past performance. B) expected future net income. C) a clean slate, with no expectations. D) to motivate the sales force. 89. The starting point in preparing a master budget is the preparation of the A) personnel budget. B) production budget. C) purchasing budget. D) sales budget. 90. Cash flow from investing activities is considered the most important category on the statement of cash flows because it is considered the best measure of expected income. A) True B) False

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