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# From the budget to the investment

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The amount
The standard cost (on average )
The material costs
2.2.1 The steps to create a material and production budgets
Identification of the substances
Determining the amount
Determination of the standard cost for each ingredient
Calculating the cost of materials for each ingredient (multiply the
amount by the standard cost)
Calculation of total material costs
The required material is the material (volume ) that you need to produce an
item .
Use the material and production costs for an item
Use keep the production budget for information on the number of
elements
Go for the calculation of the total cost as follows:
(Product A * standard costs for each product)
The sum of all products is the total cost
Check the inventory , you get to deduct the amount you need
If you need additional material, add the required minimum amount to
the total cost.
2.2.1.1 Example of a material purchase budget
Production
Product A
Product B
Product C
Total Cost
Quantity
100000
80000
30000
Standardcost 35.00 50.00 70.00
Materialcost 3‘500‘000 4‘000‘000 2‘100‘000 9‘600‘000
2.3 The working budget
This budget shows you how expensive it is to produce the item with the
worker in your organization. The following factors are important:
Time taken for each activity
The rate per hour
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