Question

A manufacturer develops bud­gets for the direct materials, direct labor, and overhead that will be required in the produc­tion process from which of the following?
A. The selling and administrative expenses budget.
B. The budget for merchandise purchases.
C. The sales budget.
D. The production budget.
E. The cash budget.

Answer 1

Answer:

The correct answer is letter "D": The production budget.

Explanation:

The production budget is the expected production of a manufacturing company. It combines the projection of sales of the firm for the current period and the number of assets needed to achieve the production level necessary. It is important for a company to have a clear idea of what investment will be needed to fulfill those expectations.