A budget is a financial plan of future costs and revenues for a particular time period in the future.

Purposes of Budgeting

  • To evaluate budgeted costs with actual costs at same level of activity
  • To aid in monitoring costs
  • To project product levels
  • To judge same with same

Operating/Subsidiary Budgets

  • Sales Budget = Budgeted Unit Sales X Budgeted Selling Price
  • Production Budget = Budgeted Sales + Budgeted Closing Stock – Budgeted Opening Stock
  • Material Usage Budget = Production Units X Units of Diff...

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