Why Might the Number of Units in the Sales Budget

question 85

Multiple Choice

Why might the number of units in the sales budget and the production budget differ?

• A)The finished goods inventory levels changed.
• B)The direct material inventory levels changed.
• C)Excess overhead costs were incurred.
• D)Customers returned merchandise.

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Definitions:

Amortized

The process of gradually reducing the cost or value of an asset, or the repayment of a debt over a period of time, through regular payments.

Patents

Patents are government grants that give inventors exclusive rights to their inventions, preventing others from making, using, or selling the invention for a certain period.

Capital Expenditure

Resources utilized by a business to purchase, improve, and upkeep tangible assets like real estate, factories, or machinery.

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities or equity on a company’s balance sheet.