The amount of raw materials to be purchased is finalised including an accurate assumption from the...

The amount of raw materials to be purchased is finalised including an accurate assumption from the production manager. Where else would you search for source documentation and what steps does it require to assemble a report about the behaviour of the budget especially the expected cost of raw materials? (80–100 words)

Expert Solution

The budgetary control of an organization requires a accurate estimation of the cost of raw-material. The various sources of the cost of material and various steps to have estimate the prices are :

1. The estimate of the material procurement managers: With the experience and on going dealing with the suppliers the managers become a good source of getting material prices.

2. Past records and invoices of material purchase: the organization past records regarding the purchase of material are a good source to have estimate of the material price.

3. Collection of material price data of the industry: The company collection towards the price of material through industry data collection is also a source of material price.

4. Quotations from the suppliers : Receiving quotes of the material prices will become a source fro budgetary estimate of the material prices.

5. Open market research : By doing a open market research of the prices of the materials and compare the prices of different producers / suppliers to reach out to apt and economical price of the materials.

Thus, a well estimate and assumptions of the managers is not only the sources of material prices for the budgetary but there stands a lot of other sources from where we can gather the prices of materials

ekkarill92 answered 1 year ago

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