3.1) Using Information Provided Sales, Production, Material Usage, Material Purchases and Value Budgets Have Been Prepared for the Month

881 Words Jun 4th, 2015 4 Pages
Introduction Financial budgets are itemised summaries of company income and expenses for a given period. It provides a concrete, organised, and easily understood breakdown of how much money a particular company can forecast coming in and how much going out in terms of expenditure. It is an invaluable tool to help prioritise the management of finance. In this report I have been tasked with analysing budgets and making appropriate decisions. Using relevant information from a children’s computer company “KidGenius” I will be explaining the calculations of unit costs and making price decisions. Also using investment appraisal techniques I will be assessing the viability of the project.
The second part of this report will be discussing the
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Also remember that there are alternative and acceptable layouts of the production budget.

Material Usage Budget January 2012:

| Product A | Product B | Total: | Units produced | 1100 | 2150 | | Material Usage M1 | 4400 | 6450 | 10850 | Material Usage M2 | 2200 | 6450 | 8650 |

Here we see an example of the inter relationships between budgets that we discussed above. Having prepared the production budget we use the outputs of the budgets as the primary input of the materials usage budget: which is the units produced.

The materials usages are found by multiplying together the number of units produced by the number of units of each raw materials required for each product. For example

Material Purchase Budget for January 2012: Material purchases in quantity and value, including total value.

Units | M1 | M2 | Used in Production | 10850 | 8650 | Opening Stock (Given) |

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