Question

Which of the following items would be included in the operating expense budget?

A. Sales commissions.
B. Raw material purchases.
C. Cash receipts.
D. Cost of goods sold.

Answer 1

Sales commissions, raw material purchases, and cost of goods sold are included in the operating expense budget.

Step-by-step explanation:

The items that would be included in the operating expense budget are:

1. Sales commissions: These are the costs associated with paying salespeople for their services.
2. Raw material purchases: These are the costs of acquiring materials necessary for production.
3. Cost of goods sold: This refers to the direct costs directly associated with producing goods or services, such as labor, materials, and manufacturing overhead.

On the other hand, cash receipts would not be included as they represent inflows of cash and not expenses.