The manufacturing overhead budget depends on all of the following except:
a.) The budgeted production in units
b.) The budgeted direct labor and budgeted direct materials
c.) The budgeted sales in units
d.) The depreciation on production facilities and equipment
Answer is Option B
The manufacturing overhead budget contains all manufacturing costs other than direct materials and direct labor. The information in this budget becomes part of the cost of goods sold line item in the master budget.
The total of all costs in this budget are converted into a per-unit overhead allocation, which is used to derive the cost of ending finished goods inventory, and which in turn is listed on the budgeted balance sheet. The information in this budget is among the most important of the various departmental budget models, since it may contain a large proportion of the total amount of a company's expenditures.
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