To begin the operational budgeting process, the first budget to complete is the:

Question

To begin the operational budgeting process, the first budget to complete is the: a. Production budget b. Direct materials budget c. Selling and administrative budget d. Sales budget To begin the operational budgeting process, the first budget to complete is the: a. Production budget b. Direct materials budget c. Selling and administrative budget d. Sales budget To begin the operational budgeting process, the first budget to complete is the: a. Production budget b. Direct materials budget c. Selling and administrative budget d. Sales budget

Explanation / Answer

The answer is “d” – sales budget.

Once a sales budget is prepared the next step is the development of production budget. Sales budget is prepared using a bottom up sales forecasting technique.

Factors that are also considered for sales budget are state of the economy, pricing policies, etc.

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