Budgeted production of product P = 200 units. Standard consumption of Raw materials = 2 kg. per unit of P. Standard price of material A = 6 per kg. Actually, 250 units of P were produced and material A was purchased at 8 per kg and consumed at 1.8 kg per unit of P. Calculate the Total Material Cost Variances and price variance.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Budgeted production of product P = 200 units.
Standard consumption of Raw materials = 2 kg. per unit of P. Standard price of material A = 6 per kg.
Actually, 250 units of P were produced and material A was purchased at 8 per kg and consumed at 1.8 kg per unit of P.
Calculate the Total Material Cost Variances and price variance.
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