The Direct Materials Usage Budget Is Based On

question 105

Multiple Choice

The direct materials usage budget is based on:

• A)the predetermined factory overhead rate.
• B)budgeted sales dollars.
• C)the units to be produced during a period.
• D)the amount of labour-hours worked.

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Definitions:

Budgeting Formulas

Mathematical expressions used to allocate resources, plan future finances, and guide financial decision-making in the budgeting process.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are an integral part of the finished product.

Units

A measurement or quantity of something, often used in the context of sales, production, or inventory in business settings.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for more accurate budgeting in dynamic environments.