November 2008
Beginner
448 pages
11h 33m
English
Content preview from Budgeting Basics and Beyond
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9.2. Planning and Control of Material Purchases and Usage
After determining the number of units to be produced, the company prepares the materials requirement budget and the materials purchase budget. Purchase of materials depends on production requirements and inventories. The direct materials budget involves a balancing of raw material needed for production, the raw material inventory balances, and the purchase of raw materials. The budget may provide for allowances for waste and spoilage.
This section discusses the procedures for developing material budgets in more detail.
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