Multiple Select QuestionSelect all that applyWhich of the following are budgets used by a service company:Multiple select question.Direct laborSalesDirect materialsCapital expendituresProductionCash
Question
Multiple Select QuestionSelect all that applyWhich of the following are budgets used by a service company:Multiple select question.Direct laborSalesDirect materialsCapital expendituresProductionCash
Solution
A service company typically does not deal with direct labor, direct materials, or production as these are more relevant to manufacturing companies. However, a service company would certainly have budgets for:
- Sales: This would cover the projected revenue from the services they provide.
- Capital Expenditures: This would cover any large expenses for things like equipment or property.
- Cash: This would cover all cash inflows and outflows, helping the company manage its liquidity.
So, the correct answers are Sales, Capital Expenditures, and Cash.
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