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D196 - Module 5 Questions and Answers 100% CORRECT
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Exam of 4 pages for the course WGU D196 at WGU D196 (D196 - Module 5)
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D196 - Module 5Master Budget - answer A network of many separate schedules and budgets that together constitute the overall operating and financing plan for the coming operating period.
All budgets start with the sales budget or sales forecast. - answer What is the first step of the budgeting process?
Based on the sales budget, a production budget is created after taking into consideration what level of finished goods the company wants and how much beginning
inventory is on hand. - answer What is the second step of the budgeting process?
In a manufacturing firm, the production budget drives the direct materials, direct labor, and manufacturing overhead budgets. - answer What is the third step of the budgeting process?
These budgets are then combined with the selling and administrative expense budget, which represents period rather than manufacturing costs, to determine what the cash budget will be. - answer What is the fourth step of the budgeting process?
Once cash inflows and outflows are known, a budgeted income statement and balance sheet (called pro forma financial statements) can be prepared that show what these financial statements will look like at the end of the period if the budget is met. - answer What is the fifth step of the budgeting process?
Pro Forma Financial Statements - answer Financial statements that show a forecast of a company's future performance based on certain assumptions rather than historical data.
Sales Budget - answer A schedule of projected sales over the budget period, which often includes a measure of revenue earned and cash collected from customers.
Typically for multiple periods to anticipate needs for the future
All other budgets follow from this budget
The business environment, which includes current government policies, tariffs between countries, the status of the economy, demographics (characteristics of the population such as age, wealth, and family status), and the state of technology
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