Jake Palermo has prepared the following list of statements about budgetary control. Identify each statement as true or false.

****If false, indicate how to correct the statement.

1. Budget reports compare actual results with planned objectives.

2. All budget reports are prepared on a weekly basis.

3. Management uses budget reports to analyze differences between actual and planned results and determine their causes.

4. As a result of analyzing budget reports, management may either take corrective action or modify future plans.

5. Budgetary control works best when a company has an informal reporting system.

6. The primary recipient of the scrap report is the production manager.

7. A static budget is a projection of budget data at one level of activity.

8. Top management’s reaction to unfavorable differences is not influenced by the materiality of the difference.

9. A static budget is not appropriate in evaluating a manager’s effectiveness in controlling costs unless the actual activity level approximates the static budget activity level or the behavior of the costs is fixed.