ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It details the required direct labor hours.
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It details the required raw materials purchases
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It is calculated based on the sales budget and the desired ending inventory.
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It summarizes the costs of producing units for the budget period.
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Detailed explanation-1: -There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget? It is calculated based on the sales budget and the desired ending inventory.
Detailed explanation-2: -The budgets that roll up into the master budget include: Direct labor budget. Direct materials budget. Ending finished goods budget.
Detailed explanation-3: -When preparing a master budget, which one of the following is the order in which the component budgets are commonly prepared? Sales, production, direct materials purchased, cost of goods manufactured, income statement, capital, cash, and balance sheet.
Detailed explanation-4: -Which of the following best describes the production budget? it provides the quantity of finished goods to be produced during the budget period.
Detailed explanation-5: -The starting point of the master budget is the sales budget. The ending point of the master budget is the budgeted financial statements. Since the budgeted financial statements include both an income statement and balance sheet, each step in the master budget has both an income statement and balance sheet component.