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Place the Letter of the Appropriate Description Beside the Budget

Question 168

Matching

Place the letter of the appropriate description beside the budget that it describes

Premises:

Responses:

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

Unit sales forecast

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

Production budget

The starting point of the budgeting process

Sales 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 materials purchases budget

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

Direct labor budget

Is determined from the unit sales forecast and unit selling prices

Overhead 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

Selling and administrative expense budget

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

Capital expenditures budget

Premises:

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

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

Correct Answer:

Premises:

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