In the Context of Budgeting, Big-Ticket Items Such as Machinery

question 89

Multiple Choice

In the context of budgeting, big-ticket items such as machinery or a new building would most likely be part of a(n) ________ budget.

• A) central
• B) capital
• C) divisional
• D) operating

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Definitions:

Production Budget

An estimate of the total cost of production, including raw materials, labor, and overhead, for a specific period.

Direct Materials

Raw materials that can be directly traced to the production of a specific product and are a significant portion of the product cost.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, usually to ensure liquidity.

Manufacturing Budget

A planned budget for manufacturing operations, detailing the projected costs associated with production.