Question

Which of the following statements is not correct?

The sales budget is typically the first budget prepared.

The sales budget is computed by multiplying estimated sales by the sales price.

The direct materials budget begins with the sales estimated for each period.

The production budget begins with the sales estimated for each period.

Answer 1

Answer :" The direct materials budget begins with the sales estimated for each period." is not correct

Explanation :

" The direct materials budget begins with the sales estimated for each period " The statement is incorrect .

The direct material budget is usually accompanied by a computation of expected cash payments for materials.

The sales budget is computed by multiplying estimated sales by the sales price which is correct .

" The production budget begins with the sales estimated for each period " is correct.

The sales budget is typically the first budget prepared beacuse , it establishes a template for other budgets that are critical to a company's success