Question

Production budget is prepared to achieve which of the following objectives?

Options

• To plan and organise the production programme for achieving the sales target.

• To serve as a basis for preparation of production cost budgets, e.g., materials cost budget, labour cost budget, etc.

• To prepare a cash forecast.

• All of these

Answer 1

All of these

Explanation:

A production budget schedules and organises output to meet sales, provides the basis for detailed cost budgets (materials, labour, overheads), and informs cash forecasts so it fulfils all the listed objectives.