Which budgets must managers prepare before they can prepare a direct materials purchases budget?
A) Labor budget
B) Overhead budget
C) Production budget
D) Cost of goods manufactured budget

Question

Quizplus · Accepted Answer

Managers must prepare a production budget before they can prepare a direct materials purchases budget. The production budget outlines the number of units that need to be produced during a specific period, which is necessary to determine the amount of materials that must be purchased. The labor, overhead, and cost of goods manufactured budgets may be useful in determining the overall cost of the production process, but they are not required before preparing a direct materials purchases budget.

Which Budgets Must Managers Prepare Before They Can Prepare a Direct