Question

Identify the order in which a manufacturer would prepare the following budgets. also note whether each budget is an operating budget or a financial budget. question content area bottom part 1

select the number from 1 to 7 to indicate first to last in preparation and then select the type of budget.
- order of preparation
- type of budget

a. budgeted income statement
b. production budget
c. combined cash budget
d. budgeted balance sheet
e. direct materials budget
f. cash payments budget
g. sales budget

Answer 1

Manufacturers prepare budgets starting with the Sales Budget and ending with the Budgeted Balance Sheet, following a sequenced approach from estimating sales to summarizing financial position.

Step-by-step explanation:

The manufacturer would generally prepare budgets in the following order:

1. Sales Budget - Operating Budget
2. Production Budget - Operating Budget
3. Direct Materials Budget - Operating Budget
4. Cash Payments Budget - Financial Budget
5. Combined Cash Budget - Financial Budget
6. Budgeted Income Statement - Operating Budget
7. Budgeted Balance Sheet - Financial Budget

The sequence reflects the typical process a business would follow as they plan from estimated sales down to financial statements that summarize expected financial position and performance. Each budget feeds into the next, culminating in a comprehensive financial plan.