A manufacturing company would prepare all of the following budgets except for:

A manufacturing company would prepare all of the following budgets except for:

A: a production budget.

B: a sales budget

C: a cash collections budget

D: An inventory purchases budget

Answer: C: a cash collections budget

The example of a manufacturing company would consist of budgets such as production, sales and managerial of inventories, but not cashing budget collections in that case. Internal sales forecasts form the basis for the production budget estimates that estimate the units to be produced. The sales budget specifies the revenue that the product is expected to generate. With the upper limit for raw material requirements, the inventory purchases budget can be determined. While this is only true for the calculate of cash collections budget that better suits service companies and customers that get the credits. In contrast with services companies, which prepare a cash budget that shows all cash inflows and outflows including the collections from customers and financial resources from loans, the manufacturing companies, produce a budget for production, which shows all cash inflows and outflows.