Which of the following alternatives reflects the proper order of preparing components of the master budget? 1. Production budget
2) Sales budget
3) Direct materials budget

Question

Quizplus · Accepted Answer

The sales budget is prepared first because it estimates the number of units expected to be sold, which determines the production needs. The production budget is prepared next to plan the number of units that need to be produced. Finally, the direct materials budget is prepared, which depends on the production budget to estimate the materials needed for production.

Which of the Following Alternatives Reflects the Proper Order of Preparing