Question

the inventory purchases budget is based on which budget? multiple choice cash budget sales budget selling and administrative expense budget none of the answers are correct.

Answer 1

The inventory purchases budget is based on the sales budget, as it uses the sales forecast to determine the required inventory purchases.

Step-by-step explanation:

The inventory purchases budget is primarily based on the sales budget. This is because the sales budget determines the forecasted sales for a given period, and consequently, the amount of inventory that will need to be on hand to meet those sales projections. The inventory purchases budget takes into account the current inventory levels, desired ending inventory, and the sales forecast to calculate how much inventory needs to be purchased.