The First Budget to Be Prepared When Making a Master

question 28

Multiple Choice

The first budget to be prepared when making a master budget is the

• A) sales budget.
• B) production budget.
• C) cash budget.
• D) direct labor budget.

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Definitions:

Standard Cost System

An accounting system that uses standard costs for product costs for the purposes of cost control and decision making.

Process Costing

An accounting methodology used for industries where production is continuous, attributing costs to units of product based on the processes they go through.

Job Order Costing

An accounting methodology used to assign manufacturing costs to an individual product or batches of products, often used in situations where each product is distinct.

Labor Price Variance

The difference between the actual cost of labor and the standard or expected cost, used as a measure of financial performance.