The quantity of material in the material purchases budget is greater than the inferred from quantity of material in the material usage budget. Which of the following statements can be this situation?
A、Wastage of material occurs in the production process
B、Finished goods inventories are budgeted to increase
C、Raw materials inventories are budgeted to increase
D、Raw materials inventories are budgeted to decrease
A、Wastage of material occurs in the production process
B、Finished goods inventories are budgeted to increase
C、Raw materials inventories are budgeted to increase
D、Raw materials inventories are budgeted to decrease
【参考答案及解析】
Once the material usage budget has been prepared, based on the budgeted production volume, the usage is adjusted for the budgeted change in materials inventories in order to determine the required budgeted purchases. If purchases exceed production requirements this means that raw material inventories are being increased, and the correct answer is C.
Once the material usage budget has been prepared, based on the budgeted production volume, the usage is adjusted for the budgeted change in materials inventories in order to determine the required budgeted purchases. If purchases exceed production requirements this means that raw material inventories are being increased, and the correct answer is C.