Use the Following to Answer Questions

question 8

Multiple Choice

Use the following to answer questions:
Figure: Leisure 3
-(Figure: Leisure 3) Refer to the figure. In this diagram, the presence of the welfare program causes this person to:

• A) reduce hours of work from 12 to 0.
• B) increase hours of work from 0 to 12.
• C) reduce hours of work from 12 to 9.
• D) reduce hours of work from 8 to 3.

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Definitions:

Static Planning Budget

A budget based on a set level of activity, unchanged over the budget period and not adjusted for actual activity levels.

Spending Variance

The difference between the actual amount of an expense and the budgeted or planned amount.

Static Planning Budget

A budget based on a fixed level of activity and not adjusted for actual activity levels.

Flexible Budget

A report showing estimates of what revenues and costs should have been, given the actual level of activity for the period.