Use Of Revenue Budget
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The revenue budget should contain the assumptions made about the future and the details about the number of units to be sold the expected selling prices and so on.
Use of revenue budget. Applying the revenue formula. Ending inventory beginning inventory production sales. Assuming a sales price of 300 per door here s your revenue budget. Revenue production inventory direct materials direct labor indirect costs overhead and cost of goods sold all are budgeted items.
Consider how many garage doors you need to manufacture. These expenditures and receipts are related to the day to day functioning of the government. Revenue budget 200 units 300 revenue budget 60 000 use the inventory formula in cost accounting and now for the famous inventory formula. The main benefit of a revenue budget is that it requires looking into the future.
Similarly when the government is performing its day today functions lot of revenue will be accrued to it. The budgeted amount of revenue is then compared t. Expenditure is needed to finance government functions like defense social services administration etc and these are the main revenue expenditures. Suppose you forecast selling 200 garage doors in march.
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