Capacity Planning Is Generally Viewed in Three Time Durations: Immediate

question 66

True/False

Capacity planning is generally viewed in three time durations: Immediate, Intermediate and Indeterminate.

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Definitions:

Beginning Units

Refers to the number of units or quantity of goods on hand at the start of an accounting period.

Operating Budget

A detailed projection of all expected income and expenses based on forecasted sales revenue during a specified period, usually a fiscal year.

Direct Labor Budget

A financial plan that estimates the cost of the direct labor required to meet production needs, including wages of workers who are directly involved in the manufacturing of goods.

Cash Budget

A forecast of cash inflows and outflows over a specific period, used to manage liquidity and ensure sufficient cash is available for operations.