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A manufacturer's operating budgets consists of the: (Check all that apply.)Multiple select question.cash budgetsales budgetproduction budgetsselling expense budgetpurchases budget

Question

A manufacturer's operating budgets consists of the: (Check all that apply.)Multiple select question.cash budgetsales budgetproduction budgetsselling expense budgetpurchases budget

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Solution

A manufacturer's operating budgets can consist of several components, depending on the specific operations of the business. Here are the components from your list that typically make up a manufacturer's operating budget:

  1. Sales Budget: This is a detailed schedule showing the expected sales for the budget period; an important component of the master budget.

  2. Production Budgets: These budgets outline the number of units that must be produced within a certain period to meet the sales needs.

  3. Selling Expense Budget: This budget outlines all costs associated with selling the product, including advertising, sales salaries, commissions, and travel expenses.

  4. Purchases Budget: This budget is used to plan and control the purchase of materials and goods that are used in the production process.

The cash budget, while an important part of a company's overall financial plan, is not typically considered part of the operating budget. The cash budget is a detailed plan that shows the anticipated inflows and outflows of cash within a period.

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