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Production budget for sales 50,000 units, opening FG 6,000, closing FG 5,000. Production required:
A49,000
B51,000
C61,000
D45,000
Answer & Solution
Correct answer: A. 49,000
1. Required production = Sales + Closing finished goods − Opening finished goods.
2. Substitute: 50,000 + 5,000 − 6,000.
3. = 49,000 units.
4. The other options arise from sign errors in inventory adjustment.
_Source: ICAI BoS Inter Paper 3, Ch 15 "Budget", §15.7.2 Illus 7_
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