Budgeted Direct Materials Purchases in Units Equals

question 23

Multiple Choice

Budgeted direct materials purchases in units equals:

• A) budgeted direct materials usage less beginning direct materials plus desired ending direct materials.
• B) budgeted direct materials usage plus beginning direct materials less desired ending direct materials.
• C) budgeted direct materials in stock plus beginning direct materials inventory less desired ending direct materials.
• D) budgeted direct materials in stock less beginning direct materials inventory plus desired ending direct materials.

---

Definitions:

Sunk Cost

A cost that has already been incurred and cannot be recovered.

Contribution Format

An income statement format that separates fixed and variable costs, showing contribution margin which is sales revenue minus variable costs.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, indicating how much contributes to covering fixed costs.

Variable Expenses

Costs that vary in proportion to changes in the level of activity or volume of production.