There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget? Multiple Choice It details the required raw materials purchases. It details the required direct labor hours. It is calculated based on the sales budget and the desired ending inventory. It summarizes the costs of producing units for the budget period.

Answer:It is calculated based on the sales budget and the desired ending inventory.

Explanation:

The production budget is one achieved from the addition of sales and the calculated amount of finished goods to have ready to cover for the unexpected rise in demand by showing the number of units that must be manufactured during each budget period to cover the sales needs and to cater for the ending inventory requirements.

Each part of production budget such as direct materials purchases budget, direct labor budget, and overhead budget is required to produce the production budget.

The main aim and importance of the production budget is to maintain an optimal balance between sales, production and the desired ending inventory of the firm.

It summarizes the costs of producing units for the budget period.

It details the required raw materials purchases.