Which of the following describes the production budget?
A) It aids in planning to ensure the company has adequate inventory and cash on hand.
B) It provides the quantity of finished goods to be produced during a budget period.
C) It depicts the breakdown of sales on the basis of terms and conditions of collection of sales revenue.
D) It helps in planning to ensure the business has adequate cash.

Question

Quizplus · Accepted Answer

The production budget provides the quantity of finished goods to be produced during a budget period. It helps in planning the production process and ensuring that the company has the necessary resources to meet its production goals, such as raw materials and labor. It is an essential component of the overall budgeting process for manufacturing companies. The other options are not correct descriptions of the production budget.

Which of the Following Describes the Production Budget