Budgetary Control



Download 0.71 Mb.
View original pdf
Page16/23
Date06.06.2021
Size0.71 Mb.
#56830
1   ...   12   13   14   15   16   17   18   19   ...   23
Budgetary Control
Factors to be Considered
 Opening & closing stocks to be maintained as it will affect material requirements Maximum & minimum stock quantities Financial resources available Purchase orders placed before the budget period against which supplies will be received during the period under consideration Policy of the management regarding materials or components to be manufactured within the business as distinct from those purchased from outside This budget shows the estimated quantities of all the raw materials and components needed for production demanded by the production budget.
36


Ex:-The sales manager of Mahesh & Co. Ltd reports that next year he expects to sell 50,000 units of a certain product. The production manager consultants the storekeeper and forecast his figures as follows:
Two kinds of raw materials A and Bare required for manufacturing the product. Each unit of the product requires kg of A and kg of B. The estimated opening balances at the commencement of the next year are finished product, units, A kg, kg. The desirable closing balances at the end of the next year are;
finished product, units, A kg, B 16,000kg.
Draw up a material purchase budget for the next year.
37



Download 0.71 Mb.

Share with your friends:
1   ...   12   13   14   15   16   17   18   19   ...   23




The database is protected by copyright ©ininet.org 2024
send message

    Main page