The budget that summarizes future plans for the acquisition of fixed assets is the what?A. Direct materials purchases budgetB. Production budgetC. Sales budgetD. Capital expenditures budget

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The best answer for this question is D; the budget that you are describing is the capital expenditures budget.

When we talk about capital, we are talking about the sorts of things that are used to make the products a firm produces.  In other words, we are talking about things like machines and buildings and land rather than the raw materials that actually get made into the product.

Therefore, a capital expenditures budget is going to set out the firm's plans for fixed assets.  It will set out what kinds of machines and buildings the firm plans to create.   Here is a quote from the link below:

Capital expenditures are the allocation of resources to large, long term projects. The capital budget is a statement of the planned capital expenditures.  ...  Given the nature of capital expenditures, the capital budget is best thought of as an expression of the goals and strategy of the firm.

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