Which of the following budgets are needed to calculate unit product costs? Direct labor budget Direct materials budget Cash budget Selling and administrative budget Manufacturing overhead budget

Question

Business

Gordon Carpenter

13 February, 02:52

Which of the following budgets are needed to calculate unit product costs? Direct labor budget Direct materials budget Cash budget Selling and administrative budget Manufacturing overhead budget

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Answers (1)

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Coleman Mcmahon · Answer 1

The following budgets are needed to calculate are as follows:

Direct labor budget

Direct materials budget

Manufacturing overhead budget

Explanation:

The three budgets put together are known as production budget which are as a result of sales budget.

When a company determines its projected sales, it goes ahead to prepare its production budget in order to fulfill forecast sales as contained in the sales budget. The quantity to be manufactured is based on the opening inventory for the period, forecast sales quantity as well as the desired ending inventory quantity.

In order to determine production level, the opening inventory is added to forecast sales and desired ending inventory is subtracted to arrive at the estimated production units for the period.