The production budget should be carefully coordinated with the sales budget to ensure that production and sales are kept in balance during the period. The number of units to be manufactured to meet budgeted sales and inventory requirements for each product is established in the production budget. The budgeted volume of production is determined as follows:

                     Expected units to sell
                  + Desired unit is ending inventory
                   - Estimated units in beggining inventory
                     Total units to be produced

   The following table shows the production budget for the company Colt Manufacturing, Inc.

Colt Manufacturing, Inc. Production Budget For the Year Ending December 31, 2008
	UNITS
	Wallets	Handbags
Sales (Sales budget)	528,000	280,000
Plus desired ending inventory, December 31, 2008	80,000	60,000
Total	608,000	340,000
Less estimated beggining inventory, January 1, 2008	88,000	48,000
Total Production	520,000	292,000