The master budget of a merchandising company includes a:
A)Production budget.
B)Direct materials budget.
C)Factory overhead budget.
D)Direct labor budget.
E)Purchases budget.

Question

Quizplus · Accepted Answer

A merchandising company does not produce goods, therefore it does not have a production budget, direct materials budget, factory overhead budget, or direct labor budget. However, a merchandising company does purchase goods for resale, so a purchases budget is included in the master budget.

The Master Budget of a Merchandising Company Includes A