ECONOMICS

Detailed explanation-1: -Answer and Explanation: The correct answer is the d. desired ending finished goods units minus beginning finished goods units. The required production units are calculated by determining the estimated sales and the finished goods inventory in hand.

Detailed explanation-2: -False. The statement is false that production budgets should always show both budgeted units of product and costs because the production budgets should always show the budgeted units of product and not the costs. The production manager is more interested in the number of units produced during a specific period.

Detailed explanation-3: -Therefore, in simple equation form, production budget = The sales budget or forecast + Planned inventory to be maintained in the end – Inventory in the beginning.