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Answer to Question #54477 in Other Economics for khanh nguyen hoang

Question #54477
You are responsible for the manufacturing budget preparation. What other forecast or budget/s affects the raw materials budget and in what way? How would a growth in the sales forecast affect the raw materials budget? What will this growth mean to the budgeted statement of financial performance and what should be considered in terms of the capacity of the production department and costs across all departments?
Expert's answer
If you are responsible for the manufacturing budget preparation, then some other forecast or budgets like sales or labor affect the raw materials budget. For example if sales increases, then raw materials use increases too. This growth will improve the budgeted statement of financial performance and the capacity of the production department and costs across all departments will be increased.

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