What Is the Proper Preparation Sequencing of the Following Budgets

question 38

Multiple Choice

What is the proper preparation sequencing of the following budgets?
1) Budgeted Balance Sheet
2) Sales Budget
3) Selling and Administrative Budget
4) Budgeted Income Statement

• A) 1 2 3 4
• B) 2 3 1 4
• C) 2 3 4 1
• D) 2 4 1 3

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Definitions:

Fixed Expenses

Costs that do not fluctuate with changes in production level or sales volume, such as leases and insurance premiums.

Contribution Margin

The amount by which the sale of a product exceeds its variable costs, contributing towards covering fixed costs and generating profit.

Return On Investment (ROI)

A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Net Operating Income

The total profit of a business after operating expenses are deducted but before taxes and interest are calculated.