The first step in preparing the sales budget is toa. prepare a sales forecast.b. review the production budget carefully.c. assess the desired ending inventory of finished goods.d. talk with past customers.e. increase sales beyond the forecast level.

When developing a budget we focus first on sales. Why do be begin with sales? What are some of the factors we should consider when preparing the sales budget?

Use the guiding questions below to develop recommendations based on the June budget to help the manager of the marketing department • How does the budget help the marketing department coordinate their needs with other departments? • How can the budget be used to evaluate the marketing department’s performance?

Management Accounting Question (Qualitative Short Answer) a. Why is the sales forecast the starting point in budgeting? b. What is a perpetual budget? c. Which is a better basis for evaluating actual results: budgeted performance or past performance? Why? d. The materials price variance can be computed at what two different points in time? Which point is better and why? e. What effect, if any, would you expect purchasing poor-quality materials to have on direct labor variances? f. Distinguish between ideal and practical standards. g. Costs associated with the quality of conformance can be broken down into four broad groups. What are these four groups and how do they differ? h. What is likely the most effective way to reduce a company's total quality costs? i. What are the three main uses of quality cost reports?