A Purchases Budget Is Used Instead of a Production Budget

question 6

Multiple Choice

A purchases budget is used instead of a production budget by

• A) merchandising companies.
• B) service enterprises.
• C) not-for-profit organizations.
• D) manufacturing companies.

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Definitions:

Commodity Stock

A stock that represents companies involved in the extraction, production, or sale of raw materials, such as metals, energy, and agricultural products.

Wholesale Price

The cost of goods sold in large quantities, typically to retailers or other entities for resale, not including retail markup.

Trade Discount

A reduction in the listed price of goods or services offered by sellers to buyers in the business-to-business market.

Net Price

The actual price paid for a product or service after subtracting any discounts, rebates, or allowances from the list price.