Beginning inventory plus budgeted production equals sales plus targeted ending inventory in a production budget.

Question

Quizplus · Accepted Answer

The production budget is a financial plan that outlines the production levels and costs for a specific period. The beginning inventory is the amount of inventory on hand at the beginning of the period, and the budgeted production is the amount of inventory that is planned to be produced during the period. The sales are the amount of inventory that is expected to be sold during the period, and the targeted ending inventory is the amount of inventory that is desired to be on hand at the end of the period. The production budget ensures that the beginning inventory plus the budgeted production equals the sales plus the targeted ending inventory.

Beginning Inventory Plus Budgeted Production Equals Sales Plus Targeted Ending