Which of the following is a true statement?
A) The direct materials purchases budget is determined from the direct labor budget.
B) The only budget providing input into the revenue budget is the sales budget.
C) The direct materials purchases budget and the capital expenditures budget are both determined from the production budget.
D) The selling and administrative expense budget is input into the forecasted cost of goods sold.

Question

Quizplus · Accepted Answer

The sales budget is the primary input into the revenue budget, as it provides the basis for projecting the amount of sales revenue that will be generated during the budget period. The direct materials purchases budget is typically based on the production budget, which forecasts the amount of units to be produced and the amount of materials needed to produce them. The capital expenditures budget is separate from the production budget, as it focuses on investments in long-term assets like property, plant, and equipment. The selling and administrative expense budget is not directly related to the cost of goods sold, as it includes expenses related to areas like sales commissions, advertising, and office supplies.

Which of the Following Is a True Statement