In the Development of a Cash Budget, Which of the Following

question 26

Multiple Choice

In the development of a cash budget, which of the following elements must be determined first?

• A) Ending balance of Accounts Receivable
• B) Direct materials purchases
• C) Estimated sales in units
• D) Cash for payroll

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Definitions:

Selling Price

The amount of money charged for a product or service, determined by considering costs, market demand, competition, and profitability.

Unit Product Costs

The calculated cost assigned to a single unit of product, typically including direct materials, direct labor, and allocated overhead.

Markup

Markup refers to the amount added to the cost price of goods to cover overhead and profit, calculated as a percentage of the cost.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate overhead costs to products or cost objects based on a consistent activity measure.