Question

Which of the following statements is true? a.The sales budget includes both units and dollars. b.The direct labor budget uses an average wage rate for direct labor. c.The overhead budget is typically composed of variable overhead and fixed overhead.d.The production budget is not converted into dollars. e.All of these choices are correct.

Answer 1

Answer:

E) All of these choices are correct.

Explanation:

A sales budget estimates the total amount of goods and services that a company plans to sell during the next accounting period, it includes both units of goods or services and the money they should generate.

The direct labor budget estimates how much the company will spend in direct labor during the next accounting period. It includes the wage rate per hour and the hours needed to complete the production requirements.

The overhead budget estimates the expected costs for all production costs except direct materials and direct labor, it is divided into variable overhead per unit and fixed overhead per total production.

The production budget estimates the number of units that should be produced, it doesn't consider production costs nor selling price.