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A Production Budget Example
Learn more about a production budget.
The Production Budget
The production budget must be adequate to meet budgeted sales and to provide for the desired ending inventory.
- The management at Royal Company wants ending inventory to be equal to 20% of the following month’s budgeted sales in units.
- On March 31st, 4,000 units were on hand.
Preparing the production budget….
Note: If Royal was a merchandising company it would prepare a merchandise purchase budget instead of a production budget.
Example
Over to you
Take a look and the example and make sure you understand how to create the Production Budget.
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