iley.corr$/$was$/$ui$/$v$2/$adaptive$-$assessment$-$player$/$index$.$htmiPlaunchld$=4$a$7$c$5219-51$be$-4234-97$cof$9$b$9861$bb$7$ae#$/$activity

apter $9$

$40$ W

irect Labor, Manufacturing Overhead, and $58$A Expense Budgets

athan is working on the operating budgets for his company. He has already done the sales and production budgets, and he is now orking on the direct materials, direct labor, and manufacturing overhead budgets. He decides to do the direct labor budget first, then he manufacturing overhead budget, then the direct materials budget. Do you think this is an appropriate way to prepare the budgets? Shy or why not?

No$,$ because the direct labor budget depends on the direct materials budget so the direct materials budget should be prepared first.

Yes, because the direct materials budget depends on the direct labor and manufacturing overhead budgets so it should always be prepared last.

No$,$ because the manufacturing overhead budget depends on the direct materials budget so the direct materials budget should be prepared second.

Yes, because the manufacturing overhead budget depends on the direct labor budget but none of the other budgets depend on the direct materials budget.