The Direct Materials Budget Is Prepared Using Information from the ________

question 69

Multiple Choice

The direct materials budget is prepared using information from the ________ budget.

• A) cash
• B) master
• C) capital expenditure
• D) production

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Definitions:

Cost Allocation

The process of identifying, aggregating, and assigning costs to cost objects, such as departments, products, or projects, for budgeting, accounting, or costing purposes.

Reciprocal Services

The process in cost accounting where two or more departments provide services to each other and the costs of these services are allocated between them.

Direct Method

A costing approach that allocates service department costs directly to producing departments without considering service department interactions.

Support Department

A division within an organization that provides essential services to other departments but does not directly contribute to profit, such as IT or HR.