06-30-2009, 02:05 PM
Actually no fixed quantity of closing stock is maintained but it is presumed/forecasted or budgeted to complete process of making production budget. Many cost accounting functions work like mathematical equation for instance you can determine the CGS with some known figures and some unavailable figures. Simmilarly while making Production budget with the known balance of opening stock,budgeted sales and required or desired closing stock it is determined how much quantity of an inventory item should be produced.
Production budget will be used to propose how much quantity you will manufacture so that you can compensate for the demand (identified on your sales budget).
For any query feel free to contact me.
Regards,
Awais Aftab
Production budget will be used to propose how much quantity you will manufacture so that you can compensate for the demand (identified on your sales budget).
For any query feel free to contact me.
Regards,
Awais Aftab