Which of the following provides the catalyst for all operating budgets?
A) Firm's ten-year plan
B) Production budget (units)
C) Capital expenditures budget
D) Unit sales forecast

Question

Quizplus · Accepted Answer

The unit sales forecast is the best choice for providing the catalyst for all operating budgets, as it provides the basis for determining production, inventory, and sales budgets. Without a reliable forecast of unit sales, it would be difficult to create accurate budgets for other areas of the business. The firm's ten-year plan and capital expenditures budget may provide additional information and context for budgeting decisions, but they are not the primary catalyst for operating budgets. The production budget is based on the unit sales forecast and is not the starting point for budgeting.

Which of the Following Provides the Catalyst for All Operating