Material purchase budget

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:26AM in AAT student discussion
hi, can you help me please?

Does material purchase budget always include the wastage percentage given in the data?

thanks

Cat

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Material purchase budget

    It all depends on how the information is given in the data. It will either require you to adjust for materials, therefore of wastage is 4% it will be 4/96 x good prodn figure (sales-opening stock+closing stock) or you might have to adjust the production budget for faulty production which is calculated in a similar way. The important thing to do is look at the question and if the it mentions wastage then adjust the MATERIAL PURCHASES budget & if it says faulty production the adjust the PRODUCTION budget. Hope this helps!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Material purchase budget

    I remember it as, finished goods scrap - adjust production

    Any wastage before finished goods, requires more material, so adjust purchase budget.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Material purchase budget

    thank you!

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