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Definition of Standard Cost, Steps in setting standards. Purpose of Budget Raw Material Purchases Budget (See Note below) Net Present Value Discounted Payback period. Note: Management Accounting problems can have more than one solution. The solution for the Raw Material Purchases Budget given is what I thought at the time I was working it. My thought was that the opening stock (not given in the data) was included in the total of required units each month. However this may not necessary be so because it can be determined and deducted.

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