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Planned Budgeted Production formula

User Dispake
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The Planned Budgeted Production formula depends on what information you have available and what you want to calculate.

Here are two common formulas:

1. Planned Production Units: This formula calculates the number of units a company needs to produce based on its projected sales and desired ending inventory.

Planned Production Units = Projected Sales + Desired Ending Inventory - Beginning Inventory

2. Planned Production Budget: This formula calculates the total cost of producing the planned units.

Planned Production Budget = Cost per Unit x Planned Production Units

Cost per Unit: The total cost of producing one unit, including direct materials, direct labor, and manufacturing overhead.

Planned Production Units: The number of units calculated in the first formula.

Explain the Planned Budgeted Production formula and how is is used.

User Rmckeown
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