The First Step in Preparing the Operating Budget Is the ________

question 118

Multiple Choice

The first step in preparing the operating budget is the ________.

• A)cash budget
• B)capital budget
• C)operating expense budget
• D)sales budget

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Definitions:

Activity Cost Pools

A method in cost accounting where costs are accumulated according to the activities that incur them.

Activity-Based Costing

A costing methodology that assigns costs to products and services based on the resources consumed in the production process.

Manufacturing Overhead

All indirect costs associated with manufacturing, such as utilities, maintenance, and salaries for supervisors, not directly tied to a specific product.

Overhead Cost

Expenses related to the ongoing operation of a business that are not directly tied to producing goods or services, such as rent, utilities, and administrative salaries.