Virtually Every Phase of a Manufacturer's Master Budget Is Dependent

question 57

Multiple Choice

Virtually every phase of a manufacturer's master budget is dependent on:

• A) the sales forecast.
• B) the wastage rate.
• C) the production forecast.
• D) the capital expenditure forecast.

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Definitions:

Accruals

Accounting method where revenue and expenses are recorded when earned or incurred, regardless of when the cash transaction occurs.

Quick Ratio

A financial metric that measures a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory.

Accounts Receivable

Accounts receivable are amounts owed to a business by its customers for goods or services delivered but not yet paid for.

Inventories

Items such as goods or merchandise held by a company, intended for sale or production.