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

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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

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