"A ltd is a manufacturing company that has no production resource limitations for the foreseeable future. The Managing Director has asked the company mangers to coordinate the preparation of their budgets for the next financial year. In what order should the following budgets be prepared?
(1) Sales budget
(2) Cash budget
(3) Production budget
(4) Purchase budget
(5) Finished goods inventory budget"

A. (2), (3), (4), (5), (1)

B. (1), (5), (3), (4), (2)

C. (1), (4), (5), (3), (2)

D. (4), (5), (3), (1), (2)

Answer: Option B

Solution(By Examveda Team)

The order in which the budget should be prepared are Sales budget, Finished goods inventory Production budget, Purchase budget and Cash budget.