Question

LO 7.2What operating budget exists for manufacturing but not for a retail company?

Answer 1

Production Budget

Step-by-step explanation:

Production Budget is usually substituted with Purchasing budget for a retail company.

The operating budget usually consist of the:

• sales budget,

• production budget,
• manufacturing overhead budget.

However, for a retail company that usually do not produce their products or inventory but purchase them, the Production Budget is usually substituted with Purchasing budget or merchandise inventory to be purchased; meaning since they do not have raw materials they substitute the number of units to be purchased, to the number of units to be produced.