Budget of direct material costs (budget of purchases of basic materials and inventories)

Having data on production volumes, you can begin to develop a budget for direct material costs.

The budget of direct material costs and inventory items in its content includes three components:

• ? budget (estimate) of basic materials (need);
• ? the budget of stocks of materials at the beginning and end of the budget period;
• ? materials procurement budget.

They are interconnected: the estimate of the need for basic materials serves as the basis for the procurement plan for materials, stocks of materials are integral part procurement plan, all together used to justify production program.

To prepare an annual budget for direct material production costs, the following information is required:

• 1) production volume in units (pieces, meters, kilograms, sets, etc.);
• 2) the amount of materials required for the manufacture of a unit of production (consumption rate);
• 3) unit cost of each type of material.

With the help of this information, the standard direct material costs for the production of a unit of output are determined, which, in turn, establish the budget level of direct material costs and are the basis for developing a budget for the purchase of direct (basic) materials.

According to the conditional example, the required amount of basic materials for the production of furniture was calculated (table 7).

When drawing up a budget (estimate) of direct material costs, they proceed from the invariance of the consumption rates of materials and prices for them. If these parameters change during the budget period, the estimates are recalculated.

Sometimes managers need to know a specific amount of materials, taking into account possible losses. The inclusion in the budget of the expected losses of raw materials and materials allows you to control the level of real losses, and, if it exceeds the budget, promptly take measures to prevent overspending.

Table 7 Estimated direct material costs in 200X

* The cost of the material includes the purchase price and transportation and procurement costs (TR) 10% of the purchase price.

The material usage budget serves as the basis for budgeting the purchase of materials. To budget for the purchase of materials, it is necessary to provide for the formation of carry-over stocks of materials at the end of the budget period, and when drawing up the budget, make an adjustment for the level of initial stocks (that is, stocks at the end of the current period).

Production stocks for the purposes of planning the requirements for materials are divided into current, preparatory and insurance (reserve).

The current stock is necessary to ensure the production of materials for the period between two successive deliveries (the timing and frequency of deliveries are specified in the contract with suppliers of raw materials and materials). It is determined for uniform deliveries as the product of the average daily material consumption by the time interval between two successive deliveries:

A preparatory stock is created at the time of unloading materials, quantitative and qualitative acceptance, preparation for use. Its value is determined by the conditions of production, types of materials, organization of storage facilities.

Taking into account the stocks of materials at the beginning and end of the planning (budget) period, there is a balance dependence between the volume of purchases of materials and its required (consumable) quantity:

Hence the amount of materials that need to be prepared in the budget period:

In a conditional example, the budget for direct costs of materials is presented in table 8.

A number of factors need to be taken into account when drawing up the procurement budget, such as price increases, discounts, commercial credit conditions, possible substitute materials, exchange rates, etc.

Sometimes the budgets for the use and purchase of materials can be compiled in the form of a single document. But if several types of materials are used in production (a large range of materials), the budget loses its analyticity, and the effectiveness of the budgeting control function decreases.

The sequence of budgeting direct material costs:

• 1. Determine the most important types of raw materials and materials needed for the production of products.
• 2. Calculate the consumption rates of raw materials and materials per unit of products to be manufactured, or for the entire sales volume in accordance with the share of direct material costs.
• 3. Projected changes in the structure of direct material costs (due to changes in material consumption rates, prices for any types of raw materials and materials) must be adjusted in the corresponding month of the budget period.
• 4. Determine other direct costs for materials using the rate in rubles per unit of output and the planned sales volume in each month of the budget period.

In the conditional example, to simplify the calculations, other direct costs for materials are not provided.

Table 8 Budget for direct material costs for 200X

Note:

• * data taken from the estimate for materials, taking into account 1% inflation per month (table 7).
• ** account for 50% of the next month's material requirements.
• *** is equal to the ending stock in the previous month.

The procurement budget of manufacturing companies depends on the planned production volume. Based on the planned volume, production plans to purchase the required amount of materials at a certain cost. The procurement budget is a plan for purchasing products from the product range by product type or by main suppliers. Shows how much and what products should be purchased by the enterprise from external (import) and internal suppliers. The purchase budget is compiled by the purchasing department based on the sales budget, since the volume of purchases directly depends on the volume of sales. The volume of purchases of raw materials and materials depends on the expected volume of their use, as well as on the expected level of stocks.

The formula for calculating the volume of purchases is as follows:

Volume of purchases = volume of use + stocks at the end of the period - stocks at the beginning of the period

The procurement budget, as a rule, is drawn up taking into account the timing and procedure for repaying accounts payable for materials.

Planned requirements for the purchase of materials and their use can be prepared both in one document and in separate independent budgets. Many prefer a single document. This budget determines the timing of the purchase and the amount of raw materials, materials and semi-finished products that must be purchased to fulfill production plans. The use of materials is determined by the production budget and proposed changes in inventory levels. By multiplying the number of items of materials by their estimated purchase prices, the material purchase budget is obtained.

The source of information for building a procurement budget is the following data:

1) the need for basic material resources obtained during the formation of the production plan,

2) the level of balances of material resources at the beginning of the planning period,

3) the level of standards for stocks of material resources,

4) consolidated applications for non-standardized materials for the implementation of production economic activity, supplier offers,

5) prices for all types of material resources.

The need for materials for the implementation of the production program is calculated based on the estimated production volume and reasonable consumption rates of material resources: As a rule, in order to analyze planned indicators and monitor execution, the procurement budget can be grouped by financial responsibility centers, costing cost items, types of materials, suppliers and structural divisions.

The procurement budget is a plan for purchasing products from the product range by product type or by main suppliers. The procurement budget consists of:

1) Budget for the purchase of raw materials (production budget). Procedures: - on the basis of the plan for the volume of production, a plan for the purchase of volumes of raw materials and materials is developed; - the volume of purchases is made at an acceptable price, purchases and make up the total amount of the budget for the purchase of raw materials; - the total amount for the purchase is divided by the period of time and the budget for the purchase of raw materials by periods is obtained.

2) The budget for the purchase of goods for repair and maintenance. Compiled from past information, adjusted for expected changes in stock levels and general prices over a period of up to 12 months

3) The budget for the purchase of fixed assets is drawn up for several years, often up to 5 years. The decision to plan the purchase of fixed assets is made on the basis of production needs, obsolescence of existing fixed assets, and the need to replace them. Issues about delivery times, OS costs are resolved, price increases and payment options for suppliers are taken into account

4) The budget of administrative expenses. Contains information about the remuneration of managers and supervisors. To calculate, you need to know the employment of staff and the functions of the procurement department, only after that the budget itself is developed in numbers. The budget of administrative expenses includes the following elements: - payroll fund for employees of the procurement department; - deductions for social needs; - amount of lease payments; - fuel and energy; - equipment maintenance costs; - travel expenses; - the cost of processing orders; - office expenses; - postage and communication costs; - the cost of training employees of the purchasing department. A comparison with the budget of administrative expenses of the previous year is mandatory, according to which the planned budget is adjusted. The final procurement budget includes the adjusted procurement budgets listed above.

The essence of budgeting and its functions

Budgeting is the process of planning the activities of an enterprise. There are current (short-term, up to 1 year) and prospective (long-term, more than a year). Budgeting refers to current planning.

The basis of budgeting is budgeting. A budget is a plan of an enterprise's activities in terms of money. It shows the planned amount of income to be achieved, the costs to be incurred during the period under review, as well as the capital that needs to be raised to implement the plans. As a result of budgeting, it becomes clear what profit the enterprise will receive when implementing a particular action plan.

Budgeting Features

1. Planning. The budget, being an integral part of the plan, contributes to the clear and purposeful work of the enterprise.

2. Coordination activities of departments. In the process of developing budgets, the plans of individual responsibility centers are coordinated with each other. This encourages managers of individual departments to work towards achieving the goals facing the company as a whole.

3. Control. The deviation of the actual results from the planned ones, which are determined monthly, serve to control the activities of the responsibility centers and their leaders. In some companies, bonuses to AC managers may be calculated as a certain percentage of a favorable variance in its responsibility center (for example, as a percentage of the amount of materials saved);

4. Stimulation. The budgeting process is a powerful tool for motivating managers to achieve the goals of their responsibility centers.

Structure of the general budget

Depending on the tasks set, there are general and private budgets.

budget that covers general activities enterprise is called general. Its purpose is to combine and summarize the estimates and plans of various departments of the enterprise.

The budgets of various departments of the enterprise are called private budgets.

The general budget of any organization consists of an operating and financial budget.

In turn, the operating budget includes the following types of budgets:

1. Budget for implementation (sales);

2. Production budget;

3. the budget for direct material costs and the budget for the purchase of materials;

4. Budget of direct labor costs;

5. budget for overhead (overhead) expenses;

6. Cost budget products sold

7. Budget for commercial and administrative expenses;

8. Profit and loss budget.

The financial budget includes:

1. Movement forecast Money;
2. Forecast balance;
3. Investment Plan

Unlike financial reporting(for example, balance sheet, form No. 3, etc.) the form of the budget is not standardized. Its structure depends on the object of planning and the degree of qualification of the developers.

EXAMPLE of operating budgeting.

Let's consider an example of drawing up the operating budget of a manufacturing enterprise.

The sewing enterprise is engaged in sewing women's suits, using two types of fabrics - wool and flannel. The management of the enterprise needs to develop an operating budget for 2009.

The management of the enterprise determined its development plan for 2009 as follows:

Tab. 1. Forecast for the sale of costumes

Tab. 2. Planned inventory level finished products at the end of the period

Tab. 3. Planned value of direct costs

Tab. 4. The composition of direct costs included in the cost of production

Tab. 5. Planned stocks of materials at the end of the period

Tab. 6. Planned value of indirect costs

Tab. 7. Data on the availability of materials in stock at the beginning of the period

Tab. 8. Data on the availability of finished products (suits) in stock at the beginning of the period

1 step. Sales budgeting

Sales budgeting is the starting point for the entire overall budgeting process.

For almost all organizations, the sales budget is the most difficult step in the planning process. This is due to the fact that the volume of sales and. Therefore, revenue is determined not so much production capabilities enterprises, how many marketing opportunities for real market, which is influenced by uncontrollable factors:

the activities of competitors;

· General position in the national and world market;

· Seasonal fluctuations in demand;

· Stability of suppliers and buyers.

There are two main estimates that underlie the sales budget:

1. Stat. forecast based on mathematical analysis of general economic conditions, market conditions, production growth curves.

2. Expertise obtained by collecting the opinions of the sales staff. In some companies, the sales staff evaluates the sales of the product for each of the customers. In other companies, regional managers estimate the total sales volumes in general for their region.

Based on the sales forecast, a sales budget is prepared. (Data from Table 1)

SALES BUDGET

2 step. Preparation of the production budget.

The production budget determines how many units of output must be produced to meet the sales budget and to maintain the inventory of finished goods at the level planned by management.

The production budget is compiled both in kind (pcs) and in monetary units.

The volume of production in natural units is calculated as follows:

Production budget = Sales budget + Projected stock of finished goods at the end of the year - stock of finished goods at the beginning of the period.

Therefore, the production budget has the following form

3 step. Development of a budget for the cost of materials and a budget for the purchase of materials in natural units

When planning the purchase of materials, it is necessary to take into account the level of stocks both at the beginning and at the end of the planning period.

To calculate the consumption of materials in natural units, you need to know:

Stocks of material at the beginning of the reporting period;

· Material requirements to meet the production budget.

By the time the budget was drawn up, the warehouse of the enterprise had 7,000 flannels and 6,000 meters of wool, the cost of which was determined as 49 and 60 thousand rubles. (table 7)

According to table 4, 6 meters of flannel and 4 meters of wool are required for one suit. Production program: for costumes - 1000 pieces. Calculate the cost of material, in meters, for the production program

Budget of direct material costs

In order to determine how many materials need to be purchased in the planning period, one should take into account what level of stocks the company wants to reach by the end of the period. According to Table. 5, the company wants to reach the volume of stocks for flannel - 8,000 m, for wool - 2,000 m.

Procurement budget for basic materials in physical and value terms

"Album of budgetary forms of a small enterprise".

Procedure for drawing up the Procurement and Inventory Budget:
1. Determination of standard values ​​of stocks of purchased goods at the end of the month in physical terms by months
2. Determining the cost of stocks for all months.

Figure 8.4. a flowchart of the process of budgeting purchases and stocks is presented.

Figure 8.4. Procurement and Inventory Budgeting Process

Procurement and inventory budgeting starts with collecting the necessary data. These include:

• Sales volumes (units)
• Purchase prices for the period
• VAT rates
• Stock rates of goods and materials (%)
• Material consumption plan (unit)
• Percentage of payment for the supply of the current period in the same period
• Delivery cost per period
• Payment for deliveries of the previous period (%)
• Debt due in the current period (%)

Goods for resale section

Step 1 Calculation of the cost of purchased goods (excluding stocks). The cost of each item is determined separately. Next, the total value of the cost of all goods is determined. The total cost of purchased goods is reflected in the column "Total cost of purchased goods". The amount of VAT is allocated as a separate line in the column "including VAT" in each cost of goods, as well as in their total value.

Step 2 Calculation of the cost of target stocks of goods at the end of the period. For each product, a target inventory standard is set at the end of the period in physical terms, defined as a percentage of sales volume (units). Next, the target stock of goods at the end of the period is determined in value terms for each product. The total value of the target stock of goods at the end of the period in value terms is reflected in the column “Total target stock of goods at the end of the period”. The amount of VAT is allocated as a separate line in the column "including VAT" in each cost of target stocks of goods at the end of the period, as well as in their total value.

Step 3 Calculation of the cost of target stocks of goods at the beginning of the period. The stock of goods at the beginning of the period is equal to the stock of goods at the end of the previous period. For each product, the stock at the beginning of the period is determined in value terms. Further, the total value of stocks of all goods at the beginning of the period is reflected in the column "Total stock of goods at the beginning of the period". The value of VAT is allocated as a separate line in the column "including VAT" in each cost of target stocks of goods at the beginning of the period, as well as in their total value.

Step 4 Calculation of the amount of expenses for the purchase of goods. The total amount of expenses for the purchase of goods by periods is determined. This amount is reflected in the column "Total amount of costs for the purchase of goods." The amount of VAT is allocated in a separate line in the column "including VAT".

Section Materials

Step 1 Calculation of the cost of purchased materials (excluding stocks). The cost of each material is determined separately. Next, the total value of the cost of all materials is determined. The total cost of purchased materials is reflected in the column "Total cost of purchased materials". The amount of VAT is allocated in a separate line in the column "including VAT" in each cost of materials, as well as in their total value.

Step 2 Calculation of the cost of target stocks of materials at the end of the period. For each material, a target inventory standard is set at the end of the period in physical terms, defined as a percentage of sales volume (units). Next, the target stock of materials at the end of the period is determined in terms of value for each material. The total value of the target stock of materials at the end of the period in value terms is reflected in the column "Total target stock of materials at the end of the period". The amount of VAT is allocated as a separate line in the column "including VAT" in each cost of target stocks of materials at the end of the period, as well as in their total value.

Step 3 Calculation of the cost of target stocks of materials at the beginning of the period. The stock of materials at the beginning of the period is equal to the stock of materials at the end of the previous period. For each material, the stock at the beginning of the period is determined in value terms. Further, the total cost of stocks of all materials at the beginning of the period is reflected in the column "Total stock of materials at the beginning of the period". The amount of VAT is allocated as a separate line in the column "including VAT" in each cost of target stocks of materials at the beginning of the period, as well as in their total value.

Step 4 Calculation of the amount of costs for the purchase of materials. The total amount of costs for the purchase of materials by periods is determined. This amount is reflected in the column "Total amount of costs for the purchase of materials." The amount of VAT is allocated in a separate line in the column "including VAT".

Having compiled the Goods for Resale and Materials sections, the total amount of purchase costs for the period is determined. This value is reflected in the column "Total amount of procurement costs". The amount of VAT is allocated in a separate line in the column "including VAT".

Purchase payment schedule

Step 1 Calculation of the amount of accounts payable due at the beginning of the period. The amount of accounts payable at the beginning of the period for each purchased product is determined, as well as the total amount of accounts payable at the beginning of the period for all purchased goods. Next, the amount of payables payable at the beginning of the period for each purchased material is determined, as well as the total amount of accounts payable at the beginning of the period for all purchased materials. The total amount of accounts payable at the beginning of the period for purchased goods and materials is reflected in the column “Total amount of accounts payable to be paid at the beginning of the period”.

Step 2 Determining the amount of payment for the deliveries of the current period. The amount of payment for deliveries for each purchased product is determined, as well as the total amount of payment for all purchased goods. Next, the amount of payment for deliveries for each purchased material is determined, as well as the total amount of payment for all purchased materials. The total amount of payment for current period deliveries for purchased goods and materials is reflected in the column “Total payment for current period deliveries for purchased goods and materials”.

Step 3 Determination of the amount of debt payable in the current period for the purchased goods and materials (distribution of payment of last year's debt by periods of the current year). The amount of debt payable in the current period is determined for each purchased product, as well as the total amount of debt for all purchased goods. Next, the amount of debt payable in the current period for each purchased material is determined, as well as the total amount of debt for all purchased materials.

Step 4 Calculation of the balance of accounts payable at the end of the period. The balance of accounts payable at the end of the period is determined for each purchased product, as well as the total value of the balance of accounts payable at the end of the period for all purchased goods. Further, the balance of accounts payable at the end of the period for each purchased material is determined, as well as the total value of the balance of accounts payable at the end of the period for all purchased materials. The total balance of accounts payable at the end of the period for purchased goods and materials is reflected in the column “Total balance of accounts payable at the end of the period”.

The total actual amount of payments for the current period for purchases is reflected in the column "Total payments".

The procurement budget of manufacturing companies depends on the planned production volume. Based on the planned volume, production plans to purchase the required amount of materials at a certain cost. The procurement budget is a plan for purchasing products from the product range by product type or by main suppliers. Shows how much and what products should be purchased by the enterprise from external (import) and internal suppliers. The purchase budget is compiled by the purchasing department based on the sales budget, since the volume of purchases directly depends on the volume of sales. The volume of purchases of raw materials and materials depends on the expected volume of their use, as well as on the expected level of stocks.

The formula for calculating the volume of purchases is as follows:

Volume of purchases = volume of use + stocks at the end of the period - stocks at the beginning of the period

The procurement budget, as a rule, is drawn up taking into account the timing and procedure for repaying accounts payable for materials.

Planned requirements for the purchase of materials and their use can be prepared both in one document and in separate independent budgets. Many prefer a single document. This budget determines the timing of the purchase and the amount of raw materials, materials and semi-finished products that must be purchased to fulfill production plans. The use of materials is determined by the production budget and proposed changes in inventory levels. By multiplying the number of items of materials by their estimated purchase prices, the material purchase budget is obtained.

A plan of costs and time for a certain period, which are necessary to meet the material needs of the enterprise, provided for by the budget, in the context of materials

To assess the effectiveness and expediency of the selected areas of activity for the coming period, the operating and financial budgets of the enterprise are formed. An important condition for the smooth operation of the enterprise is high-quality planning and full security of the need for material resources.

The procurement budget is formed as a plan for the logistics service and determines the need for the purchase of raw materials, materials, components in physical and value terms in the planning period:

the purchase plan in kind is designed to determine the required volume and range of material resources;

The source of information for building a procurement budget is the following data:

1) the need for basic material resources obtained during the formation of the production plan,

2) the level of balances of material resources at the beginning of the planning period,

3) the level of standards for stocks of material resources,

4) consolidated applications for non-standardized materials for implementation production and economic activities, supplier offers,

5) prices for all types of material resources.

The need for materials for the implementation of the production program is calculated based on the estimated production volume and reasonable consumption rates of material resources: As a rule, in order to analyze planned indicators and monitor execution, the procurement budget can be grouped by financial responsibility centers, costing cost items, types of materials, suppliers And structural divisions. The calculated total volume of purchases of a particular material for the period is allocated to suppliers in accordance with the priority of contracts and supply proposals. In case of limited supply of resources from the most priority supplier, the analysis of the possibility of the following contracts takes place. The purchase budget in terms of value is calculated for each contract by multiplying the quantity of the material by its price. If the contract with the supplier has a specific price behavior that differs from the established rate of increase in the price of the material, then contract prices are used. It is possible to apply the basic prices of materials, taking into account dynamic changes - the inflationary (average) index. Procurement and inventory budgeting starts with collecting the necessary data. These include:

1) Sales volumes (units)

2) Purchase prices for the period

3) VAT rates

4) Norms of stocks of goods and materials (%)

5) Material consumption plan (units)

6) Percentage of payment for the supply of the current period in the same period

7) Delivery cost for the period

8) Payment for deliveries of the previous period (%)

9) Debt due in the current period (%)