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Hi Sir
Two statements goes like this :
The purchasing mgr reduced the price of material by placing large order at the start of quarterAt the end of previous quarter a company bought a new machine and thereby in the first quarter material wastage was reduced.
which of these should be a reason for revising a budget.. ?
Answer says second statement
Can you help me with why >
I need to see the whole question to be able to answer you (for example, you have not said what it is that is being budgeted). If it is either a past exam question or a question from the BPP Revision Kit, then tell me which and I will be able to find it.
Sorry sir. There was an opening statement :
“After a company prepared its material budget for the first quarter these info came into light .
he purchasing mgr reduced the price of material by placing large order at the start of quarterAt the end of previous quarter a company bought a new machine and thereby in the first quarter material wastage was reduced.
which of these should be a reason for revising a budget.. ?
The materials budget budgets for the total amount of material needed.
Whether they place a large order or several small orders will not affect the total being ordered and therefore they will not need to revise the budget.
However, the fact that the wastage will be reduced means that the total they order will be reduced and so the budget will need revising for this.
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