There are various budgets within the master budget.One of these budgets is the production budget.Which of the following best describes the production budget?
A) It details the required direct labour hours.
B) It details the required raw materials purchases.
C) It is calculated based on the sales budget and the desired ending inventory.
D) It summarizes the costs of producing units for the budget period.

Question

Quizplus · Accepted Answer

The production budget is calculated based on the sales budget and the desired ending inventory. It outlines the number of units that must be produced during the budget period to meet sales demand and maintain an adequate inventory level. The production budget does not detail the required direct labor hours or raw materials purchases, and while it summarizes the costs of producing units, that is not its primary purpose.

There Are Various Budgets Within the Master Budget