Which of the Following Budgets Are Needed to Calculate a Budgeted

question 58

Multiple Choice

Which of the following budgets are needed to calculate a budgeted unit cost?

• A) Direct materials purchases budget
• B) Direct labor budget
• C) Overhead budget
• D) Direct materials purchases budget and overhead budget
• E) Direct materials purchases budget, direct labor budget, and overhead budget

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Definitions:

Fixed Costs

Expenses that do not change with the level of goods or services produced over a short time.

Variable Costs

Expenses that change in proportion to the activity or production level of a business.

Fixed Costs

Expenses that remain constant for a period of time irrespective of the level of outputs, like rent, salaries, and loan payments.

Break-even Volume

The quantity of sales needed for a product to generate revenue that matches the total costs, resulting in no profit or loss.