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.

Question

Quizplus · Accepted Answer

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, it does not necessarily mean that the expected number of units sold is less than the number of units to be produced during the period. It could have been due to factors like increased demand or lower production. The production budget is only one part of the overall budget, and other factors like sales forecasts, marketing expenses, and overhead costs should also be considered to determine the expected number of units sold.

In a Production Budget, If the Number of Units in Finished