Quiz #8: Budgeting
1. When preparing a direct materials budget, the required purchases of raw materials in units equals:
a. raw materials needed to meet the production schedule + desired ending inventory of raw
materials − beginning inventory of raw materials
2. Which of the following statements is NOT correct concerning the Cash Budget?
a. It is not necessary to prepare any other budgets before preparing the Cash Budget.
3. Which of the following budgets are prepared before the sales budget?
a. Choice D
4. There are various budgets within the master budget. One of these budgets is the production budget.
Which of the following BEST describes the production budget?
a. It is calculated based on the sales budget and the desired ending inventory.
5. The usual starting point for a master budget is:
the sales forecast or sales budget.
1. When preparing a direct materials budget, the required purchases of raw materials in units equals:
a. raw materials needed to meet the production schedule + desired ending inventory of raw
materials − beginning inventory of raw materials
2. Which of the following statements is NOT correct concerning the Cash Budget?
a. It is not necessary to prepare any other budgets before preparing the Cash Budget.
3. Which of the following budgets are prepared before the sales budget?
a. Choice D
4. There are various budgets within the master budget. One of these budgets is the production budget.
Which of the following BEST describes the production budget?
a. It is calculated based on the sales budget and the desired ending inventory.
5. The usual starting point for a master budget is:
the sales forecast or sales budget.
