Prepare the material cost budget of products of a company, Cost Accounting

Prepare the Material Cost Budget of products of a Company

For a company along with many products, a periodic budget would be developed given as: Assume a firm has 3 products X001, X002 and X003 along with standard material costs of Shs.3.5, 7.25 and 1.50 respectively.  The management intends to produce 5000 units, 1500 units and 2500 units of the three products respectively in the given period as like to achieve its target profits for the next period.

Required

Prepare the material cost budget for the company.

Solution

 

 Standard

 Planned

 Total

 

 Material cost

 Output

 Material Cost

 

 (Shs)

 

 (shs)

 Product X001

 3.50

 5000

 17,500

 Product X002

 7.25

 1500

 10,875

 Product X003

 1.50

 2500

 3,750

 

Total Material Cost Budget:

 275,000

Another difference between budgets and standards in those budgets is revised regularly, generally on a quarterly, monthly or annually basis.  Standards are merely revised when they are not appropriate for employ in the current operating conditions. Finally, standard costs and the different resulting from their analysis form part of the accounting double entry system, from that the final financial statements are prepared. On the other hand, budgets are merely memorandum figures and don't form part of the accounting double entry system.

Posted Date: 2/7/2013 5:33:15 AM | Location : United States







Related Discussions:- Prepare the material cost budget of products of a company, Assignment Help, Ask Question on Prepare the material cost budget of products of a company, Get Answer, Expert's Help, Prepare the material cost budget of products of a company Discussions

Write discussion on Prepare the material cost budget of products of a company
Your posts are moderated
Related Questions
Prepare the Material Cost Budget of products of a Company For a company along with many products, a periodic budget would be developed given as: Assume a firm has 3 products X


Both the parts, Profit and Loss Account and Trading Account of last account are interdependent upon each other. Gross Profit or loss plays a very important role in the calculation

Moore Corporation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings (the corporation uses the nearest full

Budgeted direct labour cost 75000 hours @ $16 per hour Budgeted manufacturing overhead 80 000 hours @ $17.50 per hour Actual direct labour cost $997 500 Budgeted manufa

Zero Based Budgeting It is referred to also like priority based budgeting. It is a cost advantage approach budgeting where it is assumed that the cost allowance is Zero for a

Relationship between Cost Accounting and Business Enterprise Cost accounting, like will be mentioned later to adopts a cost center approach to accounting for costs. A cost cen

what are the examples of factory overhead


COST PROFIT VOLUME ANALYSIS Cost profit volume (CVP) analysis is an essential tool for profit planning. It can be explained  as - ' a managerial tool showing the relationship a