The income statement begins with revenue and subtracts various operating expenses until arriving at Earnings Before Interest and
Taxes. Next, interest expense is subtracted to find the taxable income for the period. Then the appropriate taxes are calculated and subtracted. We finally arrive at the ________ , the so called bottom line of the income statement. Group of answer choices
1 answer:
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Answer:
D. Earnings before interest and taxes(EBIT)
Explanation:
Earnings before interest and taxes abbreviated EBIT in the income statement is arrived at by deducting operating expenses from revenue/sales to get operating income. The operating income is earnings before interest and taxes which comes before gross income(subtract other expenses). Operating expenses are the main expenses concerned with operations of the business such as the Sales
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Production budgets are used by manufacturers to determine the quantity of product units that will be produced. Based on the predicted sales, the production budget is chosen.
Regarding projected inventory levels, it is modified in accordance with the company's inventory policy. A manufacturer creates cost budgets for the direct materials, direct labour, and overhead expenses needed for manufacturing based on the production budget.
The company's inventory policy should be kept in mind while creating a production budget. The production budget is built on the sales budget, with changes made for starting and ending inventories.
The company's inventory management strategy affects the production budget as well. Depending on the company's strategic outlook, inventories may be increased or decreased.
For the given question, the production budget is prepared and attached in the form of an image.
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