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 labor 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 need to be produced to meet expected sales and have the desired ending inventory levels. It does not detail direct labor hours or raw materials purchases, but it does include information on the cost of producing the units. Therefore, choice C is the best answer.

There Are Various Budgets Within the Master Budget