Which of the following an example of an operating budget? Capital expenditures b

Question

Which of the following an example of an operating budget? Capital expenditures budgets sales budget cash budget Budgeted retained earnings statement. Company X is preparing a plan for timing acquisitions of buildings, equipment, or other significant assets. Which budget is It preparing? Factory overheads budget Capital expenditures budget Production budget Sales budget Which of the following observations is true of theoretical capacity of production? It a Rows tor some idle capacity. It is the Ievel of production required to meet normal sales demand. It represents the usage amount assuming not loss in the process. It is used by moat manufacturing firms for budget development.

Explanation / Answer

Solution:

Question 1 The answer to the above question is - b. Sales budget It is an example of operating budget, as it shows capacity at which the operations will be conducted for the business Question 2 The answer to the above question is - b. Capital expenditure budget The above mentioned expenditures are of capital nature, thus capital expenditure budget is prepared for these expenses Question 3 The answer to the above question is - d. It is used by mostly manufacturing firms for budget development This is used to used the capacity at which a particular level of productio will be done Questin 4 The answer to the above question is - $ 33,000 + 2.25 * 20,000 = $ 78,000 a. $ 78,000

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