# CMA Study Group

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## Budgeted production costs

• #### 1.  Budgeted production costs

Posted 06-23-2021 04:55 AM

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Tejas Doke
Accountant
Dombivli MH
India
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• #### 2.  RE: Budgeted production costs

Posted 06-24-2021 03:27 AM
What aspect of it did you have difficulty with?

• #### 3.  RE: Budgeted production costs

Posted 06-24-2021 04:40 PM
Hi Tejas,

as the name & question suggests, batch setup costs vary on the basis of number of batches.
so we need to find budgeted cost per batch using info from the budget of August.
budgeted cost per batch= Total setup costs / number of batches
= (cost/unit * budgeted production) / 5 batches
= (4 * 220,000) / 5
= 176,000 per batch

An average batch produces max 50,000 units. So, 220,000 units will require (220,000 / 50,000) = 4.4
which means minimum 5 batches are inevitable for a production of 220,000 units.

on similar lines, for Sept , it will require (260,000/50,000) = 5.2  i.e 6 batches

Note - Those figures of 42,000 - 45,000 - 50,000 units are of actual batch sizes for Aug, hence are not relevant & are given only to confuse us.

I Hope this helps

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Chirag Patel
India
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• #### 4.  RE: Budgeted production costs

Posted 06-27-2021 06:59 AM
Thank you Chirag....​

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Tejas Doke
Accountant
Dombivli MH
India
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