Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

Which figure does the direct materials budget take directly from the production budget?

The amount of direct labor hours required

The total cost of direct materials used

The number of units to be sold

The number of units to be produced

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Verified step by step guidance

Understand the purpose of the direct materials budget: It is used to estimate the quantity and cost of direct materials required for production during a specific period.

Recognize the relationship between the production budget and the direct materials budget: The production budget determines the number of units to be produced, which directly impacts the calculation of required direct materials.

Identify the key input from the production budget: The direct materials budget takes the 'number of units to be produced' from the production budget as its starting point.

Calculate the required direct materials: Multiply the number of units to be produced by the quantity of direct materials needed per unit. For example, if each unit requires 2 pounds of material, and 1,000 units are to be produced, the total material required is 2,000 pounds.

Adjust for inventory considerations: Add the desired ending inventory of direct materials and subtract the beginning inventory to determine the total direct materials to be purchased.