Asked Dec 21, 2019

Operating and financial budgets. Which of the following statements is correct regarding the drivers of operating and financial budgets?

  1. The sales budget will drive the cost of goods sold budget.
  2. The cost of goods sold budget will drive the units of production budget.
  3. The production budget will drive the selling and administrative expense budget.
  4. The cash budget will drive the production and selling and administrative expense budgets.

Expert Answer

Step 1

Image Transcriptionclose

Operating Budget: The operating budget is that budget which is prepared to plan all the operating activities of an organization for a particular period. This budget combines all the sales, production, raw materials, direct labor, manufacturing overhead and selling and administrative expenses budget.


Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Cost Accounting

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 644,000 ...

A: Click to see the answer


Q: Hannah Freeman and Hugo Hernandez form a partnership by combining assets of their former businesses....

A: Partnership: It is a form of an organization which is owned and managed by two or more persons who i...


Q: Emil Corp. produces and sells wind-energy-driven engines. To finance its operations, Emil Corp. issu...

A: Click to see the answer


Q: On January 22, Zentric Corporation issued for cash 180,000 shares of no-par common stock at $4. On F...

A: Common stock: These are the ordinary shares that a corporation issues to the investors in order to r...


Q: A corporation issued $2,000,000 of common stock in exchange for $2,000,000 of fixed assets. Where wo...

A: Statement of cash flows: It is one of the financial statements that shows the cash and cash equivale...


Q: Define cost pool with three examples?

A: Cost pool: Cost pool refers to the process of grouping the costs related to a product or a departmen...


Q: “Activity-based costing is the wave of the present and the future. All companies should adopt it.” D...

A: Click to see the answer


Q: Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 40,000 shares of...

A: Cash dividends: The amount of cash provided by a corporation out of its distributable profits to its...


Q: During the current year, Marsha Engles withdrew $4,000 monthly from the partnership of Engles and Co...

A: Partnership It is that form of organization which is owned and managed by two or more persons who in...