Asked by Jessie Schneider on Jul 15, 2024
Verified
The production budget is the starting point for preparation of the direct labor cost budget.
Production Budget
A production budget is a financial plan that estimates the number of units to be produced in a given period based on forecasted sales and inventory requirements.
Direct Labor Cost
The total expense for human labor directly involved in the production of goods or services.
- Acquire knowledge on the interrelation between sales, production, and further budgets in the context of the budgeting sequence.
Verified Answer
JM
Jessica MohannaJul 18, 2024
Final Answer :
True
Explanation :
The production budget provides information on the number of units to be produced, which is necessary for calculating direct labor costs. Therefore, the production budget serves as the starting point for preparing the direct labor cost budget.
Learning Objectives
- Acquire knowledge on the interrelation between sales, production, and further budgets in the context of the budgeting sequence.
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