When Preparing a Direct Materials Budget, the Required Purchases of Raw

question 73

Multiple Choice

When preparing a direct materials budget, the required purchases of raw materials in units equals:

• A) raw materials needed to meet the production schedule + desired ending inventory of raw materials − beginning inventory of raw materials.
• B) raw materials needed to meet the production schedule − desired ending inventory of raw materials − beginning inventory of raw materials.
• C) raw materials needed to meet the production schedule − desired ending inventory of raw materials + beginning inventory of raw materials.
• D) raw materials needed to meet the production schedule + desired ending inventory of raw materials + beginning inventory of raw materials.

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Definitions:

Cost Of Goods Sold

Represents the direct costs attributable to the production of the goods sold by a company.

Accounts Receivable Turnover

A financial ratio that measures how often a company collects its average accounts receivable balance within a period.

Income Statement

A financial statement that shows a company's financial performance over a specific period, detailing revenues, expenses, and profit or loss.

Balance Sheet

A financial report detailing a company's possessions, debts, and owner's equity at a particular moment.