Which of the Following Alternatives Reflects the Proper Order of Preparing

question 24

Multiple Choice

Which of the following alternatives reflects the proper order of preparing components of the master budget?
1) Financial budget
2) Operating budget
3) Capital expenditures budget

• A)2,3,1
• B)1,3,2
• C)1,2,3
• D)3,1,2

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Definitions:

Fixed Costs

Rephrased: Expenses that remain constant regardless of the amount of goods or services produced by a business.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.

Budgeted Net Income

The projected net income for a future period, based on expected revenues and expenses.

Variable Expenses

Expenses directly linked to the volume of output, adjusting in accordance with business activity levels.