Which of the following forms the base of all operating budgets?
A)Direct materials purchases in units
B)Production budget (units)
C)Capital expenditures budget
D)Unit sales forecast

Question

Quizplus · Accepted Answer

The unit sales forecast is the foundation of all operating budgets because it is used to determine the production budget, direct materials purchases, and other expenses. Without a reliable estimate of unit sales, it would be difficult to create accurate budgets for production, marketing, and other areas of the business. Therefore, D is the correct answer. A is not accurate on its own. B and C are derived from other areas of the budget and do not form the base of all operating budgets.

Which of the Following Forms the Base of All Operating