When calculating direct materials purchases,the starting point should be:
A)actual materials purchases from the previous year.
B)budgeted sales.
C)budgeted production.
D)budgeted cost of direct materials.

Question

Quizplus · Accepted Answer

The starting point to calculate direct materials purchases should be the production budget, as it indicates the estimated amount of finished goods that need to be produced during the period. From this production budget, the required amount of direct materials can be estimated, which can then be used to calculate the budgeted cost of direct materials purchases.

When Calculating Direct Materials Purchases,the Starting Point Should Be