Unit 7 Production Budget Concepts

Which of the following budgets are needed to calculate a budgeted unit cost?

Direct materials purchases budget, direct labor budget, and overhead budget

The direct materials purchases budget is based on the sales budget.

False

The output of the cost of goods sold budget is entered into the pro forma balance sheet.

False

There are as many direct materials purchases budgets as there are products.

False

In preparing the direct labor budget, the average wage rate is used to calculate total direct labor cost.

True

The direct labor budget includes: units to be produced, direct labor time needed per unit, and total direct labor cost for the period.

True

In preparing the overhead budget, many companies use

a unit-based driver such as direct labor hours

The ending finished goods inventory budget supplies information needed for the

cost of goods sold budget.