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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Which of the following is needed to prepare the production budget?

  1. a. Direct materials needed for production
  2. b. Direct labor needed for production
  3. c. Expected unit sales
  4. d. Units of materials in ending inventory
  5. e. None of these.

To determine

Identify the component which is needed to prepare the production budget.

Explanation

Production Budget:

Production budget is a part of operating budget and it is prepared on the basis of sales budget. Production budget is prepared by adding units required in ending inventory and subtracting units available in the beginning inventory to the expected sales units.

c.

Production budget is calculated by adjusting expected sales units with the units of finished goods required at end and available in the beginning. Therefore, this is the correct option.

a.

Direct material needed for production is computed during preparation of material purchase budget...

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