3. Budgeted production depends on:a. the direct materials usage budget and direct material purchases budgetb. the direct manufacturing labor budgetc. budgeted sales and expected changes in inventory levelsd. the manufacturing overhead costs budget
Question
- Budgeted production depends on:a. the direct materials usage budget and direct material purchases budgetb. the direct manufacturing labor budgetc. budgeted sales and expected changes in inventory levelsd. the manufacturing overhead costs budget
Solution
Budgeted production depends on several factors. Here's how each option relates to it:
a. The direct materials usage budget and direct material purchases budget: These budgets outline the materials required for production. If there's a shortage of materials or if they're too expensive, production may need to be adjusted.
b. The direct manufacturing labor budget: This budget details the labor costs for production. If labor costs are too high, it may be necessary to reduce production or find ways to make the production process more efficient.
c. Budgeted sales and expected changes in inventory levels: The amount of product a company plans to sell and the inventory it expects to have on hand can directly impact how much it decides to produce. If sales are expected to be high and inventory low, a company may decide to increase production.
d. The manufacturing overhead costs budget: Overhead costs like rent, utilities, and equipment maintenance can also impact production. If these costs are too high, a company may need to cut back on production.
So, budgeted production depends on all of the above - direct materials usage budget and direct material purchases budget, direct manufacturing labor budget, budgeted sales and expected changes in inventory levels, and the manufacturing overhead costs budget.
Similar Questions
A manufacturing company would typically prepare all of the following budgets except:Multiple choice question.Production budgetFactory overhead budgetCash budgetMerchandise inventory budget
After the direct materials, direct labor, and factory overhead budgets are completed, a selling and administrative expenses budget can be prepared.Select one:TrueFalse
1. The time coverage of a budget should be: a. one year b. guided by the purpose of the budget c. cover design through the manufacture and sale of the product d. shorter rather than longer 2. In which order are the following developed? First to last: A = Production budget B = Direct materials costs budget C = Budgeted income statement D = Revenues budget a. ABDC b. DABC c. DCAB d. CABD 3. Budgeted production depends on: a. the direct materials usage budget and direct material purchases budget b. the direct manufacturing labor budget c. budgeted sales and expected changes in inventory levels d. the manufacturing overhead costs budget 2 4. Building in budgetary slack includes: a. overestimating budgeted revenues b. underestimating budgeted costs c. making budgeted targets more easily achievable d. All of the above are correct. 5. A regional manager of a restaurant chain in charge of finding additional locations for expansion is MOST likely responsible for a(n): a. revenue center b. investment center c. cost center d. profit center 6. A manager of a profit center is responsible for all of the following EXCEPT: a. sales revenue b. the cost of merchandise purchased for resale c. expanding into new geographic areas d. selling and marketing costs 7. PRIMARY consideration in assigning a cost to a responsibility center is: a. whether the cost is fixed or variable b. whether the cost is direct or indirect c. who can best explain the change in that cost d. where in the organizational structure the cost was incurred 3 8. ABC Company expects to manufacture and sell 30,000 baskets in 20X9 for $6 each. There are 3,000 baskets, in the beginning finished goods inventory with target ending inventory of 4,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 20X9 budgeted income statement? a. $174,000 b. $180,000 c. $186,000 d. $204,000 9. DeArmond Corporation has budgeted sales of 18,000 units, target ending finished goods inventory of 3,000 units, and beginning finished goods inventory of 900 units. How many units should be produced next year? a. 21,900 units b. 20,100 units c. 15,900 units d. 18,000 units
The production budget is determined as expected unit sales:Group of answer choicesless desired ending inventory.plus desired ending inventory.less desired ending inventory plus beginning inventory.plus desired ending inventory less beginning inventory.
A manufacturer’s total cost of direct materials, direct labor, and factory overhead for finished products makes up:Multiple ChoiceTotal manufacturing costs.Cost of goods manufactured.Ending work in process inventory.Sales.Ending raw materials inventory.
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