Information from the manufacturing overhead budget flows to the
A)Ending inventory and costs of goods sold budget.
B)Cash budget.
C)Both to the ending inventory and costs of goods sold budget and to the cash budget.
D)Neither to the ending inventory and costs of goods sold budget nor to the cash budget.

Question

Quizplus · Accepted Answer

The manufacturing overhead budget is a component of the operating budget, which is an essential part of the master budget. The information from the manufacturing overhead budget flows into the ending inventory and costs of goods sold budget to determine the total cost of goods sold and the value of the ending inventory. It also affects the cash budget since manufacturing overhead costs are a component of the total production costs that must be paid in cash. Therefore, the correct answer is C: both to the ending inventory and costs of goods sold budget and to the cash budget.

Information from the Manufacturing Overhead Budget Flows to the