When a Company Is Preparing a Budgeted Statement of Cash

question 5

Multiple Choice

When a company is preparing a budgeted statement of cash flows and they wish to calculate the payments for operating expenses, they should refer to which of the following?

• A) Budgeted cash payments for purchases
• B) Sales budget
• C) Budgeted cash payments for operating expenses
• D) Budgeted balance sheet

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Definitions:

Variable Cost

Costs that fluctuate directly with changes in production or sales volume.

Cost Driver

Any activity or factor that can cause a change in the cost of a product or service, used in activity-based costing to allocate costs accurately.

Support Department

Departments that do not directly participate in the primary activities of a business but provide essential services or support to those that do.

Payroll Checks

Payroll checks are written by an employer to pay employees for services rendered during a specific time period.