How do you prepare raw materials production budget?

To prepare a raw materials production budget, start by forecasting the production levels based on sales projections. Then, determine the quantity of each raw material required by analyzing the bill of materials for the products being produced. Next, calculate the cost of these materials by considering current market prices and any potential price fluctuations. Finally, compile this information into a budget format that includes total quantities and costs for each raw material needed for the production period.