A Plan That Shows the Predicted Costs for Direct Materials

question 10

Multiple Choice

A plan that shows the predicted costs for direct materials, direct labor, and overhead to be incurred in manufacturing the units in the production budget is called the:

• A) Sales budget.
• B) Merchandise purchases budget.
• C) Production budget.
• D) Rolling budget.
• E) Manufacturing budget.

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Definitions:

Depreciation Expense

An accounting method used to allocate the cost of a tangible or physical asset over its useful life.

Operating Activities

The primary revenue-generating activities of a business, including the production, sales, and delivery of the company's products and services.

Investing Activities

Part of a company's cash flow statement that shows the cash spent on investments in capital assets and any cash received from the sale of those assets.

Equipment Account

A ledger account that tracks the purchase price, depreciation, and disposal of tangible assets such as machinery and equipment used in business operations.