Which of the following is true of the sales budget?
A) It provides sales data that is used to prepare financial statements for external reporting purposes.
B) It captures the variable and fixed expenses of the business.
C) It is used in the production budget.
D) It shows the cost of expected production in a period.

Question

Quizplus · Accepted Answer

The sales budget is used to determine the amount of production needed to meet sales demand, which is then used in the production budget. Option A is incorrect because the sales budget is not used in external financial reporting. Option B is incorrect as it is not a function of the sales budget to capture variable and fixed expenses. Option D is incorrect because the sales budget does not show the cost of expected production, but rather the expected sales revenue.

Which of the Following Is True of the Sales Budget