When looking at the main difference between the budget preparation process of a manufacturing company and that ofa service company,a.service company budgets focus more on the sales budget than do manufacturing companies.O b. the budget process contains the same level of complexity in both types of companies.c. manufacturing budgets focus more on the long-range planning components of the process than do servicecompanies.O d. the budget process is more important to a manufacturing company because of the higher level of capitalinvestment involved.

Answer is option d) The budget process is more important to a mnufacturing company because of the…

Answered: When looking at the main difference…

When looking at the main difference between the budget preparation process of a manufacturing company and that of a service company,

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Explain direct labour budget.

A: Definition: Operating budget: Operating budget which projects the budgeted amounts of operational…

Q: Why do companies prepare budgets?

Q: What is a standard cost? Group of answer choices The total number of units times the budgeted…

A: There are several type of costs that is being incurred in the business. Costs are the expenses and…

Q: Which of the following budgets is not part of the cost of goods sold budget? a.Factory overhead…

A: Introduction: Your operating budget fundamentally includes the cost of goods sold (COGS) budget. The…

Q: a) A company prepares the following main budgets: Sales budget. Manufacturing budget. Purchasing…

A: Honor Code- “Since you have posted multiple questions, we will provide the solution only to the…

Q: Should actual or budgeted service department costs be allocated? Why?

A: Service department: A service department is a division in an organization that is not involved…

Q: Your supervisor asks you to produce a budget variance report. Using the most common definition of…

A: Budget variance report is an important management tool to manage the performance of the business…

Q: Explaining Costs That Change with Flexible Budget Activity When preparing a company's flexible…

A: Budgets: Budgets are prepared for the planning and controlling purposes. Budgets facilitate…

Q: Why would management take extra effort to ensure approximate budgets for direct labor, direct…

A: There are a few reasons why management might take extra effort to ensure approximate budgets for…

Q: Why is it important that a firm prepares a budget and how they analyze the ongoing performance? What…

A: Budgeting is a financial plan that helps the organization in effective utilization of its resources.…

Q: Please explain why the timing of the direct materials purchases should be closely coordinated with…

A: Budgets:- Budget is referred as the financial plan of revenue and expenses pf particular company on…

Q: Differentiate between the mechanisms of an “actual costing” budgetary system against a “normal…

A: Budgetary system is the system which is applied by the company in order to be on track and within…

Q: which type of costing system do we typically use for managerial accounting purposes. normal budget…

A: The method of creating, executing, and budgetary control is known as budgeting. Budget preparation…

Q: How management accounting and cost accounting can be an efficient in monetary and non-monetary…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want a…

Q: Help me explain in tagalog or english A budget plan is essential to the realization of the plans of…

A: Budget Plan Budget plan is important to the organisation to estimate the total expenditure and…

Q: Identify and explain the different purposes of budgets for a company

A: Budgets play a vital role in the financial management of a company. They are comprehensive…

Q: production budget

A: Production Budget: A production budget is a type of budget that decides how much quantity of a…

Q: Discuss why the production quantities that are prescribed in the production budget should be…

A: The sales budget is prepared to ascertain the projected sales during the coming period, on the basis…

Q: Match the definition the term. Terms: Cost variance Overhead cost variance Price variance…

A: The practise of organizing and regulating a company's operating expenses is known as cost…

Q: Describe your understanding of budgets, both fixed and flexible, in the context of controlling and…

A: Organizations produce budgets for a variety of purposes, including cost control, performance…

Q: Activity-based budgeting focuses on estimating the costs of activities rather than the costs of…

A: Activity-Based BudgetingABB is a budgeting strategy that focuses on identifying and arranging…

Q: When generating a master budget, what schedule created first? A. Production Budget B. Sales…

A: Master Budget is summation of all budgets at lower functional level of organization.

Q: 1. Match cach of the following terms with the appropriate definition. The difference between actual…

A: Different techniques of cost Analysis Importance of cost analysis in the organisation to determine…

Q: What are some of the challenges in creating a budget for a company.

A: The objective of this question is to understand the various challenges that a company might face…

Q: Describe the difference between service organization budgets and manufacturing organization budgets.

A: A budget is made up by every organization with an aim of knowing and the determination of the money…

Q: How is the operating budget of the master budget used by management?

A: the master budget consists of all types of budget. operating budget is one of the budgets in the…

Q: how budget process fits into management’s planning process?

A: Planning as well as budgeting are critical components of managerial control. Efficient planning and…

Q: How are standards used by management in evaluating organizational units, as to their budgetary…

A: A budget refers to the financial plan that is used by managers in order to estimate revenues and…

Q: Why should the production requirements set forth in the production budget be carefully coordinated…

A: Lets understand the basics. Management prepares budget in order to estimate future profit and loss…

Q: When an organization allocated indirect costs to departments by relative size of the budgets, it is…

A: The question is True or False.

Q: Briefly describe the components of a master budget for a manufacturing organization.

A: Answer:- Master budget meaning:- A master budget is thorough financial planning document that…

Q: When would a static budget be effective in evaluating a manager performance

A: We know that budgeting is a planning tool through with entities define a predefined target for…

Q: What budgets are included in the financial budget for a merchandising company?

A: Budgets included in the financial budget for a merchandising company: Cash budget Budgeted Income…

Q: Discuss how the budgeting process in an organisation benefits a functioning standard costing system

A: The process of creating a budget is referred to as budgeting. This process involves budget planning…

Q: Identify the main purpose of a flexible budget for managers.

A: Flexible Budget: A flexible budget is a budget that is prepared for different levels of the output.…

Q: The direct labor budget and the manufacturing overhead budget are prepared directly from the a.…

A: Budgets are the forecasts or estimates to be made for future period of time. These are the…

Q: how would management use a Master budget?

A: A master budget is a central planning mechanism used by a management committee to direct a…

Q: How are the master budget and the production budget related? How does the understanding of the…

A: The master budget is a comprehensive financial plan that outlines a company's financial goals and…

Q: Suggest an appropriate ‘Activity Level’ for the following budgets: (a) Manufacturing…

A: In the process of preparation of budget, the activity level for each type of budget must be…

Question

When looking at the main difference between the budget preparation process of a manufacturing company and that of
a service company,
a.
service company budgets focus more on the sales budget than do manufacturing companies.
O b. the budget process contains the same level of complexity in both types of companies.
c. manufacturing budgets focus more on the long-range planning components of the process than do service
companies.
O d. the budget process is more important to a manufacturing company because of the higher level of capital
investment involved.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Describe how nonoutput-based cost drivers can be incorporated into budgeting.
Why should the opportunity costs of a farmer's labor, capital, and management be included on an enterprise budget?
A company is planning to purchase various machineries and equipment. Select the one which will facilitate their process to identify the amount of money required? a. Capital expenditure budget b. Production budget c. Purchase budget d. Cost of production budget
What is the principal objective of the production budget? Forecast cost of goods sold to understand the costs for making the product Manage the sales inventory to keep good count of the profit. Coordinate the production and sale of goods in terms of time and quantity Ability to understand and control the difference between actual and budgeted
Considering what you have learned in this module, describe the basic flow of the various operating budgets within the master budget for a manufacturing firm. This should include a discussion of which budget is prepared first, and how that budget is used to prepare the next budget(s). You do not need to go into detail about the calculations for every budget. Discuss how a budget for a manufacturing firm would differ from a merchandising firm. Discuss why a company may have desired ending inventory requirements, which two budgets this may impact, and how it impacts them. Provide an example of how an error in one budget could impact other budgets that come later.
How does management use an operating budget? How do they use an activity-based budget? What are the similarities and differences between these two budgets?
BUDGETED DIRECT LABOR FORMULA Please provide and show how to find the Budgeted Direct Labor for a company.
In a manufacturing company, what are the types of budgets included in the master budget? Describe each type.
Critically discuss how organisations develop cumulative budgeted costs.
Which of the following budgets for a manufacturing firm indicates the quantity ( and costs ) of raw materials that must be acquired to meet production needs and ending inventory requirements ? The capital expenditures budget The manufacturing disbursements budget The production budget The sales budget The direct materials purchases budget
Which of the following elements are used in calculating Costs in a Flexible Budget? a. Budgeted unit costs times actual quantities of output b. Actual unit costs times budgeted quantities of output c. Budgeted unit costs times budgeted quantities of output d. Actual unit costs times actual quantities of output
Discuss the managerial accounting Explain Budgeting