A business manufactures a single product and is preparing its production budget for the year ahead. It is estimated that 2,00,000 units of the…

CA Intermediate · Cost and Management Accounting · MTP · September 2026
A business manufactures a single product and is preparing its production budget for the year ahead. It is estimated that 2,00,000 units of the product can be sold in the year and the opening inventory is currently 25,000 units. The inventory level is to be reduced by 40% by the end of the year. What is production budget in units?
(A) (a) 1,95,000 units
(B) (b) 1,90,000 units
(C) (c) 1,84,000 units
(D) (d) 1,75,000 units

Suggested Answer and Working Notes:

Correct Answer: Option (B)

(b) 1,90,000 units

Topics: Budgets and Budgetary Control

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