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How does the sales budget flow through to the budgeted balance sheet? What is the difference between the operating cycle and the master budget? How is depreciation handled across the master budget statements? What is the link between budgeted contribution and the master budget? What is the order of dependency among the master budget schedules? How does the master budget serve as a coordination tool? How is the budgeted balance sheet prepared? How do changes in one budget cascade through the master budget? How do you build the master budget for a service organization versus a manufacturer? How does the master budget support scenario and sensitivity analysis?
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Budgeting & Forecasting › The Master Budget

What is the budgeted cost of goods manufactured?

Intermediate

Answer

The cost of goods manufactured budget totals the production cost of units completed in the period: direct materials used + direct labour + production overheads, adjusted for opening and closing work-in-progress. It feeds the cost of goods sold budget and, ultimately, the budgeted income statement.
DM used + DL + Prod OH +/- WIP change = Cost of goods manufactured.
Real-world example The cost of goods manufactured budget aggregates production costs before deriving cost of sales.

Common follow-ups: What does it include? | How does WIP affect it?

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All 34 The Master Budget questions