Topic 4 budgeting kế toán quản trị

Kế toán quản trị thứ tự các dự toán theo master budget, direct labour budget, direct material budget, manufacturing overhead budget .............................................................................

Learning outcomes

• Explain the relationship between financial planning and

analysis and the master budget

• List and explain purposes of budgeting

• Prepare each of the budget schedules that make up the

master budget in a non-manufacturing firm, and that exist

in manufacturing budgets as well

• Prepare the additional master budget schedules required

by a manufacturing firm

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4.1 What is Budgeting?

Budgeting is the process of identifying, gathering,

summarizing, and communicating financial and

nonfinancial information about an organization's future

activities

• Is essential part of the continuous planning for an

organization in order to accomplish long-term goals

4.1 What is a budget?

• Budgets

• a plan

• expressed in monetary terms

• covering a future time period

• based on a defined level of activity

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• Implement strategy by allocating resources in

line with strategic goals

• Co-ordinate activities and assist in

communication between different parts of the

organization

• Motivate managers to achieve targets

• Provide a means to control activities

• Evaluate managerial performance

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Slide 5

GM1 Insert updated Exhibit 1, segment information for Goodyear Tire & rubber co., chapter 18,

POA, 2005e

Gail Mestas, 1/8/2004

Operating budgeting:

- are a set of budgets that are used in planning the daily

operations of an organization : forecasting sales and

expenses

- Basis for financial budgets

Financial budgeting:

Projections of financial results for the accounting period:

forecasting cash, financial statement, and AFN

(additional funds needed)

• No standard format for budget preparation

• Procedures vary from organization to organization

• Only universal requirement is that budgets communicate the

appropriate information to the reader in a clear and understandable

Q A ?

Sales Budget

Sales budget is a detailed plan, expressed in both

units and dollars, that identifies the product (or

service) sales expected in an accounting period

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Sales Budget

• Sales budget

• Is prepared first

• Used to estimate sales volume and revenues

• Once developed, other budgets can be

developed

• These other budgets will help manage the

organization's resources so that profits can be generated on sales

In a service organization, the sales budget is called

the service revenue budget

Sales Budget

• Sales mangers use the information to

• Plan sales- and marketing-related activities

• Determine human, physical, and technical resource

needs

• Accountants use the information to

• Determine estimated cash receipts for the cash budget

• To determine the total budgeted sales

ABC prepare for sale planning in 2020 with following

As previous years, 60% of sales will be

received immediately in cash, 40% will be

receive next period,

The account receivables on the balance

sheets on 31/12/2019 was £ 350,000 which

will be paid in term 1

Prepare a sales and cash receipts forecast

Aim is to determine the volume of finished goods

needed to produce

Example: The firm want its beginning finished

goods as 10% of current sales volume, Ending

finished goods on 31/12/2020 is expected of 4,000

Beginning finished goods

Forecast materials consumed by one

product, materials needed to purchase,

materials price, and direct materials

expenses next terms

Forecast cash payment and account

Beginning materials

*

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To produce a product, the firm need 1kg of material with

Beginning materials is expected to be 10% of materials

needed in that term, Ending materials on 31/12/2020 will be

3,500 kg

As previous years, 50% of materials purchased in the term

will be paid immediately, the rest will be paid next period,

The account payables on the balance sheets on 31/12/2019

Demanded finished goods produced

(units)

Materials consumed (kg/unit)

Demanded materials for production

Cash needed for purchasing

Direct materials costs

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Production

hours needed = finished goodsVolume of * Time consumed to produce 1 product

Direct labour

costs = hours neededProduction * Payment per 1 hour

Example: To produce a product, the firm need

0.5hr with the rate per hour of $8

Pay rate per hour/labour rate per hour

Total hours needed

Labour hour rate

Direct labour costs

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Variable overhead costs is expected to be £ 4/hr

Fixed overhead costs will be £ 30,000/term, in which

Fixed overhead costs

Total overhead costs

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Costs Q 1 Q 2 Q 3 Q 4 Year

Direct material costs

Direct labour costs

Cost of goods sold

available for sale

Cost Cost per unitTotal Direct materials cost

Total Direct labour cost

Total Overhead cost

Total costs

Ending finished goods (units)

Value of ending finished goods(£)

Sales volume (units)

Cost of goods sold (£)

(For the whole year)

Variable selling and administration expenses is expected

to be £2 per unit

Advertising costs will be £25,000 per term, management

salaries will be $20,000 per term, depreciation will be

£10,000 per term,

The firm will buy transportation insurance in term 1, and

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Q 1 Q 2 Q 3 Q 4 Year

Sales volume

Variable costs per unit

Total variable costs

Advertising

Salary

Depreciation

Insurance

Other selling costs

Total fixed costs

Total selling and admin costs

Cash for selling and admin

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Sales volume

Variable costs per unit

Total variable costs

Advertising

Salary

Depreciation

Insurance

Other selling costs

Total fixed costs

Total Selling and admin costs

Cash for selling and admin

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Sales Budget in Units

A sales budget is given below for one of the products manufactured

by the Key Co The inventory of finished goods at the end of each

month must equal 20% of the next month's sales On December 31

of previous year, the finished goods inventory totaled 4,000 units

Each unit of product requires three specialized electrical switches

Since the production of these specialized switches by Key's

suppliers is sometimes irregular, the company has a policy of

maintaining an ending inventory at the end of each month equal to

30% of the next month's production needs The price of a switch is

£1

Prepare a budget showing the quantity of switches to be purchased

each month for February, March, and April and in total for the

quarter

If

• Accounts payable to suppliers, 1/2 £ 80,000

• Accounts payable to suppliers, 30/4 £ 120,000

• What is budgeted cash payments to suppliers ?

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Ending cash on 31/12/2020 was £150,000,

Expected minimum ending cash is £130,000

The firm is tended to buy an equipment in term 1 and a new

system in term 2 which cost £250,000 and £100,000

respectively

Expected taxes for each term is £20,000

Firm will borrow from bank with 3% interest per term in

cash-shortage term, and will pay back in cash-surplus term,

Firm will borrow in the beginning of the term and pay at the

end of the term

Beginning cash

Cash from sales

Total cash collected

COGs (185,000*18.645) Finished goods forecast

Noreen, E W., Brewer, P C., & Garrison, R H, (2011)

Managerial accounting for managers McGraw-Hill Irwin

1 Review Problem: Budget Schedules-page 311

2 EXERCISE 8–1 Schedule of Expected Cash Collections-page 314

3 EXERCISE 8–11 Production and Direct Materials Budgets-page 317

4 PROBLEM 8–15 Production and Direct Materials Budgets-page 318

5 PROBLEM 8–16 Direct Labor and Manufacturing Overhead

Budgets-page 319

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