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

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

Quizplus · Accepted Answer

The sales budget should be prepared first as it provides the basis for the production budget. The production budget will determine the amount of materials needed, which leads to the preparation of the direct materials budget. Therefore, the proper order is 2,1,3 or sales budget, production budget, and direct materials budget.

Which of the Following Alternatives Reflects the Proper Order of Preparing