The following budgets are developed in which order (from first to last)?
A = Production budget
B = Direct materials costs budget
C = Budgeted income statement
D = Revenues budget
A)DABC
B)ABDC
C)DCAB
D)CABD

Question

Quizplus · Accepted Answer

The correct order for developing these budgets is: D (Revenues budget), A (Production budget), B (Direct materials costs budget), and C (Budgeted income statement). The revenues budget is prepared first as it estimates the total sales, which determines the production needs. The production budget is then developed based on the sales forecast. Next, the direct materials costs budget is prepared, which relies on the production budget. Finally, the budgeted income statement is created, incorporating all the previous budgets to project the company's financial performance.

The Following Budgets Are Developed in Which Order (From First