On the Direct Materials Budget, the Total Quantity of Direct

question 74

Multiple Choice

On the direct materials budget, the total quantity of direct materials to purchase is computed as

• A)quantity needed for production + desired end inventory of DM - beginning inventory of DM.
• B)units to be produced + desired end inventory of DM - beginning inventory of DM.
• C)units to be produced - desired end inventory of DM + beginning inventory of DM.
• D)quantity needed for production - desired end inventory of DM + beginning inventory DM.

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Definitions:

Fixed Cost

A cost that does not change with the increase or decrease in the amount of goods or services produced, such as rent, salaries, and insurance.

Planning Budget

A financial plan that estimates income, expenses, and resources over a period, often used for guiding management decisions.

Revenue

The total amount of money received by a company for goods sold or services provided during a certain period.

Fixed Cost

Costs that do not change with the level of production or business activity, such as rent, salaries, and insurance.