The usual order of steps in preparing a budget is
A) production budget, sales budget, budgeted income statement.
B) sales budget, production budget, budgeted income statement.
C) budgeted income statement, production budget, sales budget.
D) budgeted income statement, sales budget, production budget.

Question

Quizplus · Accepted Answer

The sales budget should be prepared first as it is the basis for the production budget. The production budget is then prepared based on the sales budget, and finally the budgeted income statement is prepared using the information from both the sales and production budgets. Therefore, the correct order is sales budget, production budget, budgeted income statement.

The Usual Order of Steps in Preparing a Budget Is