There Are Various Budgets Within the Master Budget

question 6

Multiple Choice

There are various budgets within the master budget.One of these budgets is the production budget.Which of the following BEST describes the production budget?

• A) It details the required direct labour hours.
• B) It details the required raw materials purchases.
• C) It is calculated based on the sales budget,the desired beginning inventory and the desired ending inventory.
• D) It summarizes the costs of producing required units for the budget period.

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Definitions:

Cash

Money in the form of bills or coins, immediately available for transactions or expenditure.

Accounts Receivable

Accounts receivable from clients for merchandise or services supplied but payment not received.

Unearned Revenue

Money received by a company for goods or services yet to be provided, recorded as a liability on the balance sheet until earned.

Accounts Receivable

Unpaid amounts due to a company from its clients for delivered or utilized goods or services awaiting payment.