Which of the following is needed to prepare the production budget? a. Expected unit sales b. Cost of direct materials needed for production c. Units of materials in ending inventory d. Direct labor needed for production e. None of these choices are correct.

Expected unit sales.

Explanation:

Production budget can be defined as a report or plan that measures the amount of units that will be produced during a particular period of time. It is used by manufacturers to measure what it would cost to manufacture a particular product.

Production budget is used by managers of different organisations to estimate the number of units that they have to produce in future periods which would be in the basis of the future estimated sales numbers. Managers also utilize this report as a planning tool for future production development, machine times, and planning.

Answer: a. Expected unit sales

Explanation: The production budget determines the amount of finished goods that must be produced at each budget period to fulfil expected sales needs and also to

provide for the desired finished ending inventory. Expected units sales is therefore needed in the preparation of production budgets.

The production budget is prepared in units of finished goods, however, it may also be used in determining several other items on the budgeted financial statements such as budgeted cost of goods sold, budgeted beginning and ending finished goods inventory and budgeted cost of goods manufactured.