Which of the Following Statements Is True

question 74

Multiple Choice

Which of the following statements is true?

• A)Sound budget making procedures usually bestow upon the accounting department the honor of developing the basic departmental expense budgets.
• B)The budget making process begins with a determination of the company's forecast for sales and resultant activities for the budget period.
• C)The sales manager is not responsible for developing the sales department budget.
• D)All of these.
• E)None of these.

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Definitions:

Absorption Costing

A pricing technique that integrates all expenses related to production, such as direct materials, direct labor, along with both variable and fixed overhead costs, into a product's cost.

Operating Income

Earnings before interest and taxes (EBIT), representing the profit from a company's main business activities.

Gross Profit

The difference between the revenue generated from sales and the cost of goods sold, excluding operating expenses, interest, and taxes.

Cost Of Goods Manufactured

The total production cost of goods that were completed during a specific accounting period, including labor, material, and overhead costs.