Question

18. The direct ... budget calculates the materials that must be purchased, by time period, in order to fulfill the
requirements of the production budget
(A) fiscal
(B) stock
(C) inventory
(D) materials​

Answer 1

Answer:

(D) materials is the answer.

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Answer 2

Answer:

D) MATERIALS

The direct MATERIALS budget calculates the materials that must be purchased, by time period, in order to fulfill the requirements of the production budget.

Explanation:

Because the direct materials budget can be a huge part of all expenses — both direct and indirect — you ought to ensure you set up the budget cautiously to guarantee your organization is fruitful.

Assuming that you're indiscreet with the arrangement of your budget or on the other hand in the event that you don't ascertain it appropriately, it can lead you to misjudge or underrate your expenses. Either error can prompt genuine cash-flow issues.

It is commonly introduced in either a month to month or quarterly arrangement in the yearly budget. In a business that sells items, this budget might contain a larger part of all costs brought about by the organization, thus ought to be assembled with extensive consideration. If not, the outcome may incorrectly show unreasonably high or low cash necessities to finance materials buys.

The basic computation utilized by the direct materials budget is:

+ Raw materials required for production

+ planned ending stock balance

= Total raw materials required

- Starting raw materials stock

= Raw materials to be purchased.