A manufacturing company would typically prepare all of the following budgets except:Multiple choice question.Production budgetFactory overhead budgetCash budgetMerchandise inventory budget
Question
A manufacturing company would typically prepare all of the following budgets except:Multiple choice question.Production budgetFactory overhead budgetCash budgetMerchandise inventory budget
Solution
The correct answer is "Merchandise inventory budget".
Here's why:
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Production budget: This is a must for a manufacturing company. It details the number of units that must be produced within a certain period to meet the sales needs and inventory requirements.
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Factory overhead budget: This is also necessary for a manufacturing company. It estimates the costs of running the factory, such as utilities, maintenance, and rent.
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Cash budget: This is a comprehensive budget that every company, regardless of the industry, should prepare. It forecasts the company's cash inflows and outflows over a certain period.
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Merchandise inventory budget: This is typically prepared by retail or wholesale companies, not manufacturing companies. It estimates the cost of goods to be purchased to meet sales needs and inventory requirements. Manufacturing companies produce their goods, so they don't need to budget for purchasing merchandise inventory.
Similar Questions
All of the following are operating budgets except:Multiple choice question.production budgetsales budgetmerchandising budgetselling expenses budget
A manufacturer's operating budgets consists of the: (Check all that apply.)Multiple select question.cash budgetpurchases budgetproduction budgetsselling expense budgetsales budget
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
A company has the following annual budget data:Beginning finished goods inventory 52,000 unitsSales 82,000 unitsEnding finished goods inventory 42,000 unitsDirect materials $ 12 per unitDirect labor $ 24 per unitVariable factory overhead $ 5 per unitSelling costs $ 2 per unitFixed factory overhead $ 92,000 What are total budgeted production costs for the year? (CIA adapted)Multiple Choice$3,116,000$2,952,000$3,208,000$3,044,000
After determining the budgeted ending inventory units, the next step in the production budget is to:Multiple choice question.add beginning inventorysubtract budgeted salessubtract beginning inventoryadd budgeted sales
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