The budget sales, plus target ending finished goods inventory, minus beginning finished goods inventory is equal to ___________?
Correct answer: C. budget production
- A. setup production
- B. planned production
- C. budget production
- D. stand by production
Explanation
Required production equals budgeted sales plus desired ending finished-goods inventory minus beginning finished-goods inventory. This ensures sales requirements and the planned closing stock are covered.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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