Effectively calculate the minimum product price based on its production costs by capitalising own experience as well as clinical and mathematical calculations to perform budgeting for the business.
1. Price products
- Trace the origin of costs to calculate the exact product costs.
- Calculate the costs per production unit.
- Consider various techniques to help to allocate costs.
- Use different methods to calculate the costs of by-products.
2. Prepare budgets
- Define the value of budgeting and why budgeting could seem like a futile exercise.
- Draft the budgeting process and define how each element is impacting the others.
Calculate and reflect the following budgeting elements:
- Sales budget
- Planned production amounts
- Direct materials budget
- Cash outflow for purchases
- Direct labour budget
- Manufacturing overhead budget
- Selling and administrative budgets
- Closing inventory
- Cash budget
- Profit and loss account
- Balance sheet.
- Prepare a non-accounting cash flow budget to track the business’ cash position.