Question

A materials purchases budget must be completed immediately after the preparation of the:

A. direct labor budget.
B. operating expense budget.
C. cash budget.
D. production budget.

Answer 1

The materials purchases budget is completed immediately after the production budget.

Step-by-step explanation:

The correct answer to the question is D. production budget. A materials purchases budget is prepared immediately after the production budget in order to determine the amount and cost of materials needed for production. The production budget outlines the quantity and timing of production for a given time period. By preparing the production budget first, the producer can then determine the materials and labor required, which are reflected in the materials purchases budget and the direct labor budget, respectively.