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5 features of plant Utilization Budget

 Plant Utilization Budget is budget prepared for the estimation of plant capacity to meet the budgeted production during the budgeted period. It is a forecast of plant capacities available for fulfilling production requirements as specified in the production budget. This budget is expressed in working hours or other convenient units.

Followings are the features of Plant Utilization Budget:

  • It will be base for the requirement of machine for sale and production department.
  • It will provide the base of reasonable depreciation so that machine can be replaced in future.
  • It may be the base for the new inventions in the context of plants & machinery.
  • It will indicate the budgeted machine load on departments or machines.
  • It reveals that overloading on some departments, so that sales volume may be increased by providing after-sales service, advertisement campaigns and reducing the selling price.

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