Why might the number of units in the sales budget and the production budget differ?
A)The finished goods inventory levels changed.
B)The direct material inventory levels changed.
C)Excess overhead costs were incurred.
D)Customers returned merchandise.

Question

Quizplus · Accepted Answer

The number of units in the sales budget and the production budget may differ if there was a change in the finished goods inventory levels. For example, if the company anticipates higher sales demand, they may need to produce more units than what was originally planned in the production budget in order to maintain adequate inventory levels. On the other hand, if sales are lower than anticipated, the company may need to adjust production levels in order to prevent excess inventory buildup. The other choices (B, C, D) are not directly related to the difference between the sales and production budgets.

Why Might the Number of Units in the Sales Budget