Question

Which of the following equations is used to prepare a production budget? Multiple Choice 1.Budgeted unit...

Which of the following equations is used to prepare a production budget?

Multiple Choice

1.Budgeted unit sales − Desired units of ending finished goods inventory + Units of beginning finished goods inventory = Required production in units

2.Budgeted unit sales + Desired units of ending finished goods inventory − Units of beginning finished goods inventory = Required production in units

3.Budgeted unit sales + Desired units of beginning finished goods inventory − Units of ending finished goods inventory = Required production in units

4.Budgeted unit sales − Desired units of beginning finished goods inventory + Units of ending finished goods inventory = Required production in units

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Answer #1

Budgeted unit sales=Units of beginning finished goods inventory+Required production in units-Desired units of ending finished goods inventory

Hence Required production in units=Budgeted unit sales+Desired units of ending finished goods inventory-Units of beginning finished goods inventory

Hence the correct option is:

2.Budgeted unit sales + Desired units of ending finished goods inventory − Units of beginning finished goods inventory = Required production in units

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