Q9RQ
Question
Why is the sales budget considered the cornerstone of the master budget?
Step-by-Step Solution
Verified Answer
The sales budget estimates the sales revenue in the future.
1Step 1: Meaning of Sales Budget
A budget that shows the sales revenue based on the estimation of a company for a particular period is known as the sales budget.
2Step 2: Sales budget is considered the cornerstone of the master budget
The sales budget is considered the cornerstone of the master budget because it estimates the amount of sales revenue. The number of sales units affects the production expense and the other elements of the master budget
Other exercises in this chapter
Q7RQ
What is a master budget?
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In a manufacturing company, what are the three types of budgets included in the master budget? Describe each type.
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What is the formula used to determine the number of units to be produced?
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What is the formula used to determine the amount of direct materials to be purchased?
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