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    03-Purchase Budget

    Uploaded by

    rikesh radhe
    The document provides a manufacturing company's direct material usage and purchase budget for 2014. It gives the material requirements for Products A and B, projected production quantities, and opening and closing inventory levels for raw materials X and Y. The solution calculates the budgeted usage and purchase quantities for each material based on production needs and inventory changes over the year. It then determines the total budgeted purchase cost for materials X and Y.

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    03-Purchase Budget

    Uploaded by

    rikesh radhe
    26 views2 pages
    The document provides a manufacturing company's direct material usage and purchase budget for 2014. It gives the material requirements for Products A and B, projected production quantities, and opening and closing inventory levels for raw materials X and Y. The solution calculates the budgeted usage and purchase quantities for each material based on production needs and inventory changes over the year. It then determines the total budgeted purchase cost for materials X and Y.

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    03-Purchase Budget (1)

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    The document provides a manufacturing company's direct material usage and purchase budget for 2014. It gives the material requirements for Products A and B, projected production quantities, and opening and closing inventory levels for raw materials X and Y. The solution calculates the budgeted usage and purchase quantities for each material based on production needs and inventory changes over the year. It then determines the total budgeted purchase cost for materials X and Y.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    26 views2 pages

    03-Purchase Budget

    Uploaded by

    rikesh radhe
    The document provides a manufacturing company's direct material usage and purchase budget for 2014. It gives the material requirements for Products A and B, projected production quantities, and opening and closing inventory levels for raw materials X and Y. The solution calculates the budgeted usage and purchase quantities for each material based on production needs and inventory changes over the year. It then determines the total budgeted purchase cost for materials X and Y.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 2

    Direct Material usage and Purchase Budget

    Problem
    A manufacturing compay provides you the following information
    Particulars Product A Product B
    Material X @ Rs. 3 per unit 2 units 4 units
    Material Y @ Rs. 1 per unit 1 unit 2units
    Units to be produced as per production budget 10,000 4,000

    Inventory of Raw material :


    Particulars Material X Material Y
    Opening stock as on 01.01.2014 12,000 units 2,000 units
    estimated closing stock as on 31.12.2014 16,000 units 4,000 units

    prepare the Direct Material usage and purchase Budget for the year 2014

    final product = Product A and Product B


    input material = material X and material Y

    Solution
    Direct material usage and Purchase budget for the year 2014
    Particulars Material X Material Y
    A. Budgeted Usage ( for Production)
    For Product A 10,000 units *2 = 20,000 units 10,000 units * 1 = 10,000 units
    For Product B 4,000 units * 4 = 16,000 units 4,000 units * 2 = 8,000 units
    36,000 units 18,000 units
    Add: Closing stock 16,000 units 4,000 units
    52,000 units 22,000 units
    Less: Opening stock 12,000 units 2,000 units
    Budgeted purchase (in units) 40,000 units 20,000 units
    Rate per unit Rs. 3 Rs. 1
    Budgeted purchase (in cost)
    budgeted purchase in units * Rate per unit 40,000 units * Rs. 3 = Rs. 1,20,000 20,000 units *Re1 = Rs. 20,000

    Budgted purchase = units required Budgted Production + closing stock of raw material - opening sock of raw material

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