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Budgeting ppt

Budgeting ppt - Operational Budgeting Detail Budget Detail...

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    Operational Budgeting Detail Budget Detail Budget Detail Budget Master Master Budget Budget Summary of all phases of company plans and goals. Sales Production Materials
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    Choosing the Budget Period Operating Budget Operating Budget 2001 2002 2003 2004 The annual operating budget The annual operating budget may be divided into quarterly may be divided into quarterly or monthly budgets. (Can also or monthly budgets. (Can also be be continuous or perpetual continuous or perpetual ) ) C a p i t a l B u d g e t s C a p i t a l B u d g e t s
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    The Budget Development Process Budgeting is an integral part of the planning, operating, and control activities of managers. Planning: developing objectives and goals Control: Insuring that objectives and goals are met, comparing actual to budget BUDGETING Operating Day-to-Day management decisions
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    The Budget Development Process The operating cycle focuses on cash, thus budgeting for cash needs is crucial. Cash on hand Collection of cash from customers Disbursement of cash for manufacturing costs or purchases of inventory Sale of Product
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    Write down as many reasons as you can in one minute: What are the specific reasons to do budgeting? In Class Activity – Why Budget?
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    Reasons for Budgeting Reasons for Budgeting Budgets compel planning Budgets improve communication and coordination Budgets provide a guide to action Budgets provide a basis of performance
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    The Basic Framework of Budgeting Detail Budget Detail Budget Detail Budget Master Master Budget Budget Summary of all phases of company plans and goals. Sales Production Materials The master budget groups all budgets and supporting schedules together and coordinates all financial and operational activities, placing them into an organization- wide set of budgets for a given time period. A major goal of developing a master budget is to ensure the smooth functioning of a business throughout the budget period and the organization’s operation cycle.
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    Overview of a Budget Assembly Process-  Merchandising Merchandising Cash Budget Other Special Budgets: Taxes, Dividends, Capital Improvements, etc. Pro Forma Statements: Income Statement and Balance Sheet Sales Budget Purchase Budget Selling Expense Budget General and Administrative Expense Budget
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    Sales budget Production budget Direct materials Capital budget Pro-Forma Income Statement Direct labor Mfg o/h Admin Pro-Forma Balance Sheet Cash budget Overview of a Budget Process- Manufacturer .
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