Concept And Preparation Of Cost Of Production, Cost Of Goods Sold And Selling And Administrative Budget

Cost Of Production And Cost Of Goods Sold Budget

Budgeted production cost is known as cost of production budget. It is the aggregate of budgeted material cost , budgeted direct labor and budgeted factory overhead.

Cost Of Production Budget

Budgeted volume of material use...........................XXX

Add: Budgeted direct labor cost..............................XXX

Add: Budgeted factory overhead............................XXX

= Budgeted cost of production.................................XXX

Add: Budgeted value of opening stock...................XXX

= Budgeted value of goods available for sale.........XXX

Less: Budgeted value of ending stock....................XXX

= Budget value of cost of goods sold.......................XXX

Selling And Administrative Expenses Budget

Selling and administration expenses includes both fixed and variable expenses. Administrative expenses includes:

* Clerical wages and executive salaries

* Supplies, postage and telephone etc.

Selling and distribution expenses includes:

* Sales commission and salaries

* Advertising and sales service expenses

* Travelling expenses

* Carriage and freight on sales

* Packing cases and wages of packers

* Miscellaneous selling and distribution expenses