The production budget is equal to:
A) expected sales in units plus beginning inventory minus desired ending inventory.
B) beginning inventory plus net purchases minus ending inventory.
C) net purchases plus desired ending inventory.
D) expected sales in units plus desired ending inventory minus beginning inventory.

Question

Quizplus · Accepted Answer

The production budget is based on the expected sales in units for the budget period plus the desired ending inventory, minus the beginning inventory. This formula ensures that the company produces enough units to meet the expected sales and maintain the desired level of inventory. Therefore, choice D is the correct answer.

The Production Budget Is Equal To