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A forecast of the output planned for the budget period is the
Athe cash budget
Bthe master budget
Cproduction budget
Dthe sales budget
Answer & Solution
Correct answer: C. production budget
1. Functional budgets each cover one area of the business.
2. The production budget is a forecast of the production for the budget period.
3. A cash budget forecasts receipts and payments instead.
4. The master budget consolidates all the functional budgets into one statement.
_Source: ICAI Cost and Management Accounting Ch15 'Budgets and Budgetary Control', section 15.7_
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