Question

Which of the following represents the correct order in which the indicated budget documents for a manufacturing company would be prepared? A. Sales budget, cash budget, direct materials budget, direct labor budget B. Production budget, sales budget, direct materials budget, direct labor budget C. Sales budget, cash budget, production budget, direct materials budget D. Selling and administrative expense budget, cash budget, budgeted income statement, budgeted balance sheet

Answer 1

Answer:

Explanation:

For representing the budgeted documents in the correct order, the following ordering should be required which is shown below:

1. Sales budget

2. Production budget

3. Direct materials budget

4. Direct labor budget

5. Selling and administrative expense budget

6. Cash budget,

7. The budgeted income statement,

8. Budgeted balance sheet

First, the company has to decide how much sale is to be done in a particular year after that company can decide the purchase amount, after that material, labor and other selling expenses are required.  

Then, the cash budget should be prepared which shows the cash inflow and cash outflow position of a business. At last, the Budgeted income statement and the Budgeted balance sheet should be prepared.