When Preparing a Direct Materials Budget, Beginning Inventory for Raw

question 136

True/False

When preparing a direct materials budget, beginning inventory for raw materials should be added to production needs, and desired ending inventory should be subtracted to determine the amount of raw materials to be purchased.

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Definitions:

Disposable Income

Funds households are left with for saving or expenditure after income taxes are taken out.

APC (Average Propensity to Consume)

The fraction of income that is spent on consumption as opposed to savings.

Disposable Income

The amount of money available to households for making purchases and savings after the removal of income taxes.

Saving

The act of setting aside a portion of current income for future use, or the portion of income not spent on current expenditures.