3.1) Using Information Provided Sales, Production, Material Usage, Material Purchases and Value Budgets Have Been Prepared for the Month
The second part of this report will be discussing the …show more content…
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) |