Budgeting: A process to prepare statement that represents financial data for the future periods is called budgeting. It is used for evaluating the difference of the planned estimates and actual amounts. Production Budget: Production budget is a budget that indicates the total number of units produced by company to meet the budgeted sales and to accomplish inventory requirements. It represents the estimated units to be produced to meet anticipated sales. Direct Materials Purchase Budget: Direct materials purchase budget shows the quantity of direct materials that are necessary to meet the budgeted production and inventory. It indicates the costs related to purchase of direct materials. To prepare: Production budget.

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Chapter 23, Problem 23.6E

(a)

To determine

Budgeting: A process to prepare statement that represents financial data for the future periods is called budgeting. It is used for evaluating the difference of the planned estimates and actual amounts.

Production Budget: Production budget is a budget that indicates the total number of units produced by company to meet the budgeted sales and to accomplish inventory requirements. It represents the estimated units to be produced to meet anticipated sales.

Direct Materials Purchase Budget: Direct materials purchase budget shows the quantity of direct materials that are necessary to meet the budgeted production and inventory. It indicates the costs related to purchase of direct materials.

To prepare: Production budget.

(b)

To determine

To prepare: Direct materials purchase budget

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