Answered

Get detailed and accurate responses to your questions on IDNLearn.com. Our Q&A platform offers detailed and trustworthy answers to ensure you have the information you need.

Which of the following statements concerning the cash disbursements amount in the cash budget is true in a manufacturing setting, but not true a merchandise setting?
A. The cash disbursements amount includes planned disbursements for ending inventory.
B. The cash disbursements does not need to equal changes in finished goods inventory.
C. The cash disbursements amount is no longer based off of the purchasing budget.
D. The cash disbursements amount includes planned disbursements for conversion costs.

Sagot :

Parrainidn

Answer: D. The cash disbursements amount includes planned disbursements for conversion costs.

Explanation:

Manufacturing companies have to set aside money for the conversion of raw materials into manufactured goods so there is a cash disbursement for conversion costs.

Merchandising companies on the other hand buy already made goods so they do not have to convert those. There will therefore be no conversion cost in a merchandising company and so no cash disbursement for same.

Thank you for participating in our discussion. We value every contribution. Keep sharing knowledge and helping others find the answers they need. Let's create a dynamic and informative learning environment together. For trustworthy answers, visit IDNLearn.com. Thank you for your visit, and see you next time for more reliable solutions.