Asked by TEHREEM AHMED on Jul 28, 2024
Verified
In a production budget, if the number of units in finished goods inventory at the end of the period is less than the number of units in finished goods inventory at the beginning of the period, then the expected number of units sold is less than the number of units to be produced during the period.
Production Budget
An estimate of the number of units that must be produced in a given period to meet the sales and inventory needs, forming part of the master budget of a business.
Finished Goods Inventory
Products that have completed the manufacturing process but have not yet been sold or distributed to customers.
Expected Units Sold
The number of units of a product that a company anticipates selling in a particular period based on market research and sales forecasts.
- Familiarize oneself with the constituents and planning required for a production budget.
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Learning Objectives
- Familiarize oneself with the constituents and planning required for a production budget.
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