Which of the following best describes an effective production budget?

An effective production budget should comprehensively account for all possible expenses related to the production while also estimating potential profits. This comprehensive approach ensures that the production team has a clear understanding of all financial aspects involved, allowing them to make informed decisions about spending and resource allocation.

By including both expenses and revenue projections, the budget helps in planning for financial sustainability and profitability, which are crucial for the success of any show or production. This holistic view enables the production team to identify areas where they can cut costs or where they may need to invest more to enhance the overall quality of the production.

In contrast, focusing only on production costs without considering revenue limits the financial scope and strategic planning necessary for successful show production. Similarly, a budget managed solely by the director would not involve the necessary collaboration and oversight from other key roles in production, which could lead to oversights. Tracking only audience attendance does not provide a complete financial picture and ignores the budgeting aspect that informs better production outcomes.