m30bchapter5summer2017.pptx - ko chen Tis rs tock hutte...

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Chapter C&C Sports © T i s c he n k o I r i n a/ S h u tte rs to c k © j s n y d e rdes i gn / S to c k pho t o ©aopsan/Stockphoto ©pe t ek ar ic i/ S t oc k pho t o ©p et ek ar ic i/ S t oc k p h ot o PLANNING AND FORECASTING 5
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Unit Cash flow has been a problem. Is $7,000 in cash enough to operate on? C&C has borrowed money to finance operations An increase in award jacket sales may be the answer to more cash C&C’s president, George Douglas, wants to decrease inventory levels, but he is concerned that customer satisfaction will be affected What is the future for C&C? 5.1
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Planning and The Budgeting Process U ni t 5. 1 C&C Sports
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Unit 4.1 Who has a budget?
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Unit An operating plan expressed in dollars Shows how resources will be committed during the coming period Helps plan for the future Communicates corporate direction and coordinates corporate efforts What is a budget? 5.1
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Unit 5.1 The roles of budgeting
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Unit 5.1 Budgeting information flows
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Performance Standards U ni t 5. 2 C&C Sports
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Unit Benchmark for measuring performance – an expectation What are some examples of standards you are familiar with? In accounting, you can think of it as a budget of a single unit of output What is a standard? 5.2
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Unit 5.2 PRACTICAL IDEAL Tight, but attainable Perfection, “Factory Heaven” Where do you want to be? The standard continuum
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Unit Standards are set for both quantity and price of each input (materials, labor and overhead) Estimated cost to manufacture a single unit of product or perform a single service A budget for a single unit of output Setting standards 5.2
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Unit What are the inputs? How much of each input is required? What is the required quality of each input? How much does each unit of input cost? How do you set materials standards? 5.2
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Unit 5.2 C&C direct materials standards
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Unit What are the operations required to produce the product? How long does it take to perform each operation? Who performs each operation and how much are they paid? How do you set labor standards? 5.2
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Unit 5.2 Item Rate Base hourly rate $8.00 Payroll taxes 0.60 Fringe benefits 1.00 Standard direct labor rate $9.60 Activity Direct Labor Hours Cutting .02 Sewing .18 Machine down-time .01 Rest period .03 Standard direct labor hours .25 $9.60 per direct labor hour x .25 direct labor hours = $2.40 C&C direct labor standards
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