Solved

Match Each Budget with Its Description

Question 168

Matching

Match each budget with its description

Premises:

Responses:

Unit sales forecast

Is prepared after the production budget has been completed and the desired ending direct materials inventory amount is known

Production budget

Can be determined as soon as the unit production budget has been completed and the labor rates are known

Sales budget

The starting point of the budgeting process

Direct materials purchases budget

Can be prepared as soon as the sales budget has been completed and is made up of period expenses that are both fixed and variable with sales

Direct labor budget

Has two purposes, one of which is computing the overhead rates for the forthcoming accounting period

Overhead budget

Is determined from the unit sales forecast and unit selling prices

Selling and administrative expense budget

Influences the cash budget as well as the interest expense on the forecasted income statement and the Plant and Equipment account on the budgeted balance sheet

Capital expenditures budget

Is determined from the unit sales forecast and the desired change in the ending finished goods inventory

Premises:

Unit sales forecast

Production budget

Sales budget

Direct materials purchases budget

Direct labor budget

Overhead budget

Selling and administrative expense budget

Capital expenditures budget

Responses:

Is prepared after the production budget has been completed and the desired ending direct materials inventory amount is known

Can be determined as soon as the unit production budget has been completed and the labor rates are known

The starting point of the budgeting process

Can be prepared as soon as the sales budget has been completed and is made up of period expenses that are both fixed and variable with sales

Has two purposes, one of which is computing the overhead rates for the forthcoming accounting period

Is determined from the unit sales forecast and unit selling prices

Influences the cash budget as well as the interest expense on the forecasted income statement and the Plant and Equipment account on the budgeted balance sheet

Is determined from the unit sales forecast and the desired change in the ending finished goods inventory

Correct Answer:

Premises:

Responses:

Unit sales forecast

Production budget

Sales budget

Direct materials purchases budget

Direct labor budget

Overhead budget

Selling and administrative expense budget

Capital expenditures budget