Question

You are responsible for the manufacturing budget preparation. What other forecast or budget/s affects the raw materials budget and in what way? How would a growth in the sales forecast affect the raw materials budget? What will this growth mean to the budgeted statement of financial performance and what should be considered in terms of the capacity of the production department and costs across all departments? 200–220 words

Answer 1

the lower individual budgets that make up the Manufactwung budget 1 PeroducHon budgets 2 Materials budges 3 Labowy budgets 4 Overhead budgers The sales faw cast and the amount of materials luquired effects the law materials budger because these are needed to caluate the total cost Oy materials. If the sales poelecast increase, the budget pour law materials also incuase this quowth affects the budgeted statement of financial performance because the sales forecast increases the total expenditure budgets also increases. The labowe budgets elecure to make the number of units forecasted and owerheads budgets are also considered in ouder to Imeet sales ludwirement I labowy budget shows the total labour cost and Inumbers of tobowy hour needed fou ploduchon Thus inuecein sales locecast could mean inacast Iin the labowy budget desa as labowe bas to 0000k- mau