Sales price Equipment cost $12.50 per unit $200,000 Overhead cost $50,000 per year Operating and maintenance cost $25 per operating hour Production time per 1,000 units 100 hours Study period (planning horizon) 5 years 15% per year MARR

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.