财政预算-英文课件

PreparingFinancialForecastQiangFang1Outcome2-Analyzecostingdataandprovideinformationfordecision-makingTohaveanUnderstandingofmarginalcostinganditsapplication.tocalculatetheeffectofchangingcostsandrevenuelevelsontotalcontribution.Tocalculatebreak-evenpoint.2MarginalCostingitisgenerallyknownasatechniquetoassistmanagementinplanning,decisionmakingandcontrolbyusingandanalyzingcostingdata.inUS,itiscalleddirectcosting.Costingaproductonthebasisofitsvariablecostsonly,excludingfixedcosts.3VariableFixedMixedIdentifydifferent

costbehaviorpatterns4VariableCostsExampleConsiderGrandCanyonRailway.AssumethatbreakfastcostsGrandCanyonRailway$3perperson.Iftherailroadcarries2,000passengers,itwillspend$6,000forbreakfastservices.5VariableCostsExample0 1 2 3 4 5$24–$18–$12–$6–––––Volume(Thousandsofpassengers)TotalVariableCosts(thousands)6FixedCostsExample0 1 2 3 4 5$400–$300–$200–$100–––––Volume(Thousandsofpassengers)TotalFixedCosts(thousands)7MixedCostsExampleAmixedcostispartvariableandpartfixed.Assumeadepartmentofacompanyhasfixedcostsof$50permonth($600peryear).Therearealsovariablecostsof$3perhour.8MixedCostsExample0125250375500625$2,850–$2,100–$1,350–$600–––––Volume(hours)TotalCostsVariableCostFixedCost9RelevantRange...isabandofvolumeinwhichaspecificrelationshipexistsbetweencostandvolume.Outsidetherelevantrange,thecosteitherincreasesordecreases.Afixedcostisfixedonlywithinagivenrelevantrangeandagiventimespan.10RelevantRangeFixedCostsVolumeinUnits$160,000–$120,000–$80,000–$40,00005,00010,00015,00020,00025,000–––RelevantRange11Review－CostBehaviourFixedCostVariableCostSemi-variableCostCostsincurredinmakingaproductwhichdonotchangewiththeamountofproductmade(rentorinsurance).Moneypaidtoproduceaproductwhichincreaseswiththequantitymade(directlabourcostsanddirectmaterialscosts).Costwhichhasfixedandvariablepars(therentalofacarconsistofafixedpaymentandasumofmilestraveled).12Itreferstothedifferencebetweensalesvalueandthevariablecostsofaunitsold,contributiongoestocoverfixedcoststhenthesurplususedtoprovidetheprofit.contributionmargin13FormulaforcalculatingcontributionContribution=SalesRevenue－VariableCostsNote:onlyvariablecostsarechargedtocostunitandFixedCostsarewrittenoffagainstContributionforthatperiod.Contributionperunit=SellingPriceperunit－VariableCostperunit14ConventionalincomestatementContributionmarginincomestatementTwoApproachestoComputeProfits15ConventionalIncomeStatementSales–CostofGoodsSold=GrossMargin–OperatingExpenses=NetIncomeGrossMargin16ContributionMargin

IncomeStatementSales–VariableExpenses=ContributionMargin–FixedExpenses=NetIncomeContributionMargin17ContributionMarginExampleLuisandTommanufactureadevicethatallowsuserstotakeacloserlookaticebergsfromaship.Theusualpriceforthedeviceis$100.Variablecostsare$70.TheyreceiveaproposalfromacompanyinNewfoundlandtosell20,000unitsatapriceof$85.18ContributionMarginExampleThereissufficientcapacitytoproducetheorder.Howdoweanalyzethissituation?$85–$70=$15contributionmargin.$15×20,000units=$300,000(totalincreaseincontributionmargin)19ContributionV.S.FixedCostsContributionisusedtocover(compensate)fixedcostsoccurredinproduction.Contribution＞FixedCost

MakingprofitsContribution=FixedCostBEPContribution＜

FixedCostMakinglosses20Exercise1Thevariablecostofproducingabottleofshampoois50p.Fixedcostsamountto₤1,500permonth.Thesellingpriceis₤1.20perbottleandinthemonthofMarch,5,000bottleswereproducedandsold.YouarerequiredtodrawupaMarginalCostStatementformarch.21MarginalCostStatementPerUnit5,000bottles₤₤SalesRevenue1.206,000Less:VariableCosts0.502,500Contribution0.703,500Less:FixedCosts1,500Profit2,00022FormatofMarginalCostingExampleonP59MarginalCostStatement￡SalesRevenueLess:VariableCostsContributionLess:FixedCostsProfit23Exercise2YouaregiventhefollowinginformationforproductsA,BAndC.ABCSellingpriceperunit₤2.00₤1.50₤1.30VariableCostperunit₤1.20₤1.10₤0.80NumberofunitssoldinMarch4,0007,0002,500FixedCostsforthemonthofMarchwere₤5,000.PrepareaMarginalCostStatement.24MarginalCoststatementforMarchABCTotalNumberofunitssold4,0007,0002,50013,500₤₤₤₤₤₤₤SalesRevenue2.008,0001.5010,5001.303,25021,750Less:VariableCosts1.204,8001.107,7000.802,00014,500Contribution0.803,2000.402,8000.501,2507,250Less:FixedCosts5,000Profit2,25025Amethodforshort-termdecision-makingCost-Volume-ProfitAnalysis(CVPanalysis).CVPanalysisisanapplicationofmarginalcostingthatseekstostudytherelationshipbetweencosts,volumeandprofitatdifferingactivitylevels.Sincetheproposedchangesinactivityarerelativelysmall,sothatestablishedcostpatternsandrelationshipsarelikelytobeconsistent.26CVPAnalysisThebehaviourofcostsProfitThevolumeofproductionTherelationshipbetweenthevolumeofproductionandfixedcost:Thegreatthevolumeofproduction,themorethinlyfixedcostscanbespreadover.27AssumptionsforCVPanalysis(P61)Allcostscanbedividedintofixed,semi-variableorvariable.Semi-variablecostscontainafixedelementandavariableelement,withonlythevariableelementmovinginproportionwithactivity.Overtherangeofactivitylevels,costsandrevenueschangeinexactproportions.Volumeistheonlyfactoraffectingcostsandrevenues.Technology,productionmethodsandefficiencyremainunchanged.TherearenostocklevelchangesorthatstocksarevaluedatMarginalCostonly.Thereisassumedtobenouncertainty.28Limitingfactors(1)theavailabilityofrawmaterials;(2)skilllabour;(3)thelevelofdemandfortheproduct.29BasicCPVformulasProfit=SalesValue－TotalCostsTotalCost=VariableCosts+FixedCosts=VariableCostperunit×Productionvolume+FixedCostsSalesValue=Sellingpriceperunit×SalesVolumeProfit=SellingPriceperunit×SalesVolume－VariableCostperunit×SalesVolume－FixedCosts30TwoKeyFormulasProfit=SalesVolume×Contributionperunit－FixedCostsC/Sratio=TotalContributionSalesValue×100%贡献毛益率/边际贡献率是指边际贡献在销售收入中所占的百分比。31ImplicationsofC/Sratio(P65)Thehigherthepercentage,thegreaterthecontributiontowardsFixedCostsandProfit,whichcanbeachievedby:Anincreaseinthesellingprice(thereisariskaswell,causethecompetitionisfierce).AreductionintheVariableCostperunit.Thisismorefeasibletoachievebycutthenumberofdirectlabourhoursthroughpurchasingthelatestmachinery(however,higherdepreciationmayoffsetthisreduction).32BasicRelationshipofCVPAnalysisConditionRelationshipTotalcostsofsalesisfixedBEPdependsonsellingpriceperunit.Thehigherthesellingpriceis,thelowerBEPwillbe.Viceversa.TotalsalesvalueisfixedBEPdependsonfixedcostsandvariablecostperunit.Thehigherfixedcosts(andvariablecostpu)is,thehigherBEPwillbe.Viceversa.33Cont.ConditionRelationshipBEPisfixedThemoresalesvolumeis,themoreprofitwillbemade.Viceversa.SalesvolumeisfixedThelowerBEPis,themoreprofitwillbemade.Viceversa.34Exercise3 Basedontheinformationofexercise2,calculatethec/sratioforproductA,BandC.35SolutionforExercise3TheC/SratioforA:==40%TotalContributionSales×100%₤3,200₤8,000×100%TheC/SratioforB=(1.5-1.1)÷1.5=26.67%TheC/SratioforC=(1.3-0.8)÷1.3=38.46%36Exercise4ValanteLimitedusesgeneralpurposemachineswhichareequallysuitableformakinganyofthecompany'sproducts.Fixedcoststotal₤300,000.therelevantdatafortheyearended31/10/2006is:ProductsSupaDupaGoodEstimatedSales(units)10,00020,00040,000Sellingpriceperunit₤20₤20₤20VariableCostsperunit₤10₤15₤12Required:CalculatetheC/Sratioforeachproduct.Identifywhichofthesethreeproducts,shouldreceivethelargestpromotionalbudgetandbrieflyexplainwhy.37SolutiontoExercise4TheC/Sratio:Supa[(20-10)×10000/20×10000]×100%=50%Dupa[(20-15)×20000/20×20000]×100%=25%Good[(20-12)×40000/20×40000]×100%=40%Supashouldreceivethelargestpromotionalbudget,becauseitcanprovidethelargestcontributiontothecompany.38ConclusionAsageneralrule,abusinessshouldconcentrateontheproductwhichmakesthehighestcontributiontowardsFixedCostsandultimatelytoachievethegreatestprofit.39LimitingFactorFactorwhichlimitsacompany'sabilitytoachieveitsgoals.Forexample:Theshortholidayseasonisalimitingfactoronthehoteltrade.Theavailabilityofrawmaterials.Skilledlabour.Thelevelofdemandfortheproduct.40Exercise5ValenteLimitedarelimitedtoamaximumof120,000machinehoursperyear,withtheunder-notedmachinehoursrequiredtomakeoneunitofeachproducttype.Supa5hoursDupa1hourGood2hoursIfValenteLimitedpossessedanobjectiveofmaximizingprofit,whichproductshouldreceivethegreatestallocationofscarcemachinehours?Hint:tocalculatethecontributionofeachproductbasedonpermachinehour.41SolutiontoExercise5ProductsSupaDupaGoodSellingPriceperunit₤20₤20₤20VariableCostperunit₤10₤15₤12Contributionperunit₤10₤5₤8MachineHoursperunit5hrs1hour2hrsContributionperunitofLimitingFactor₤2pu₤5pu₤4puRanking(whichtomakefirst,secondetc)3rd1st2nd42ProducingandsellingDupawoulduse20,000hours(=20000units×1hr)ProducingandsellingGoodwoulduse80,000hours(=40000units×2hrs)Machinehoursleft:120000－(20000+80000)=20000hrsNumberofSupacanbeproduced:20000hrs÷5hrs/unit=4000units43ValanteLimitedProfitStatementFortheyearending31/10/2003Contributionfromproduct₤Dupa20000×5=100,000Good80000×4=320,000Supa20000×2=40,000TotalContribution460,000Less:FixedCosts300,000Profit

160,00044Lesson2

Break-EvenAnalysis45WhatisBEP?DefinitionIntermsofSalesRevenueorVolume,theBreak-EvenPointisthelevelatwhichtheorganisationmakesneitheraprofitnoraloss.ImplicationItinformsmanagementofthelevelofactivityatwhichafirmordepartmentmaystarttomakeaprofit.46FormulaofCalculatingBEPProfit=SalesValue－VariableCost－FixedCostAtBEP,noprofitorlossismade,therefore:SalesValue－VariableCost=FixedCostContribution=FixedCost47ConclusionAtBEPitisnecessarytoearnenoughtopayforalltheFixedCostsbeforeanyprofitisearned.AftertheBEPisreached,AllContributionwillresultinadditionalprofit.48DerivativeFormulasIntermsofUnits:BEP=IntermsofSalesValue:BEP=IntermsofSalesValue:BEP=FixedCostsContributionperUnitFixedCostsTotalContribution×SalesRevenueFixedCostsC/SRatio49Exercise1LauderLimitedsoldoneproduct.Lastyear5,000unitsweresoldatasellingpriceof₤2.00pu.Thevariablecostperunitwas₤1.50,andfixedcoststotaled₤2,000.whatistheBEP?(Usedifferentmethodstocalculate)Solution:IntermsofUnits:BEP=4000unitsIntermsofSalesValue:BEP=₤8000IntermsofSaleValue:C/Sratio=25%BEP=₤800050BEPandthetargetedprofitTheBEPcanalsoassistinworkingoutthedesiredlevelofsales(inunits)toachieveatargetedprofit:IntermsofUnits:IntermsofSalesValue:FixedCosts＋TargetedProfitContributionperUnitFixedCosts＋TargetedProfitContributionperUnit×SellingPriceperUnit51Exercise2LaudeLimitedsoldoneproduct.Lastyear5,000unitsweresoldatasellingpriceof₤2.00pu.Thevariablecostperunitwas₤1.50.andfixedcoststotaled₤2,000.letusassumethatLauderLimitedwishaprofitof₤10,000.howmanyunitswouldhavetobesold?Andhowmuchshouldthesalesvaluebe?52SolutionIntermsofunits:=IntermsofSalesValue:=₤2000＋₤10000₤2.00-₤1.50=24000units₤2000＋₤10000₤2.00-₤1.50×₤2=₤4800053TheMarginofSafetyDefinitionTheexcessofnormaloractualsalesoversalesatBEPanditindicateswhetherthebusinessissusceptibletoafallindemand.ConclusionAnarrowmarginofsafetywouldmeanthatasmallreductioninvolumewouldhaveasignificanteffectonprofits.Itisnodoubtthatawidemarginofsafetyisdesirable.54FormulasTheMarginofSafety=Normal(orActual)Sales－SalesatBEPtheMarginofSafetyRatio=TheMarginofSafetyNormal(orActual)Sales×100%Thecontributionofitisusedtoprovideprofit.55Salesquantities0FixedCostsVariableCostsTotalCostsSalesBEPBEPatquantityQ1profit56Exercise2MeganLimitedhaveproducedthefollowingdatafortheyearto31/12/2006,basedonanticipatedsalesof20,000units.Thebudgetedsellingpriceis₤12perunit.₤FixedelementDirectMaterial80,000DirectLabour50,000ProductionOverheads52,000Including₤12,000FixedCostAdministrationOverheads26,000AllFixedCostSelling&DistributionOverheads10,000AllFixedCostTotalCosts218,00057Youarerequiredtoproduce:MarginalCostStatementbasedonActualSalesforthisyearof24,000unitsandprojectedsalesnextyear(2007)of18,000units.TocalculatetheBreakEvenPointintermsofunitsforthisyear.Identifythisyear’sMarginofSafetyforactualsales.58MeganLimitedProposedMarginalCostStatementActivityPerUnit₤Thisyear24000units₤NextYear18000units₤SalesRevenue12.00288000216000Less:VariableCostDirectMaterial4.009600072000DirectLabout2.506000045000DirectProductionOH2.004800036000Contribution3.508400063000Less:FixedCostProductionOverheads1200012000AdministrationOverheads2600026000Selling&DistributionOH1000010000Profit360001500059MeganLimitedMarginalCostStatementFortheyearto31/12/200620,000units₤PerunitSalesRevenue240,00012Less:VariableCostDirectMaterial80,0004DirectLabour50,0002.50DirectProductionOH40,000(=52000-2000)2.00Contribution70,0003.50Less:FixedCostProductionOH12,000AdministrationOH26,000Selling&DistributionOH10,000Profit22,00060BEPfor2006=12000＋26000＋1000012－(4＋2.5＋2)=13714units=18000units×₤12pu－13714units×₤12pu=₤51,432TheMarginofSafetyfor200661ChangesaffectprofitChangesinSellingPricesChangesinVariableCostsChangesinFixedCostsBesides,managementwillalsoneedtoconsidertheaffectofthesechangesupon:CapacityDistributionThereactionofcompetitorsQualityofthecommodityprovidedtocustomers62ChangesinSellingPricesItisveryimportantformanagementtoknowtheresponsivenessofdemandforitsproducttochangesinprices,becauseasmalldecreaseinpricecouldresultinalargeincreaseindemand.63Exercise3ThefollowingdatahasbeenextractedfromtheManagementAccountsofMannLimited,amanufacturerofpiggybanks:CurrentActivity50,000units₤SellingPriceperunit10VariableCostsperunit4Contributionperunit6FixedCosts180,000CurrentProfit120,000BEP=180000÷(10-4)=30,000units64ThemanagementofMannLimitedhaveaskedtheirManagementAccountanttoreportuponthelikelyeffectonprofitsandbreak-evenunderthefollowingconditions:Anincreaseof20%inthesellingprice,resultingina30%decreaseinsales;Anincreaseof20%inthesellingprice,resultingina20%decreaseinsales;Anincreaseof20%inthesellingprice,resultingina5%decreaseinsales.65SolutionMannLimitedMarginalCostStatementCurrent-30%-20%-5%DemandActivity(units)50,00035,00040,00047,500₤₤₤₤Sellingprice10121212Revenue500,000420,000480,000570,000VariableCosts200,000140,000160,000190,000Contribution300,000280,000320,000380,000FixedCosts180,000180,000180,000180,000Profit120,000100,000140,000200,000BEPwillshiftto:₤180000÷₤(12-4)=22500units66Exercise4(P83)Usingtheoriginaldatafromexercise3,letusconsiderchangesinthevariablecostswhenmanagementdecidetoimprovepackaging,costingandextra25%:MannLimitedMarginalCostStatementOriginalVariableCostsActivityPerUnit50,000unitsPerUnit50,000₤₤₤₤Revenue10500,00010500,000VariableCosts4200,0005250,000Contribution6300,0005250,000FixedCosts180,000180,000Profit120,00070,000BEP(Units)180000÷6=30000180000÷5=3600067Exercise5(P84)Letususetheoriginaldatafromexercise3,onthisoccasion,imagineachangeinfixedcostscausedbyanincreasedinrentof₤25,000.MannLimitedMarginalCostStatementOriginalVariableCostsActivityPerUnit50,000unitsPerUnit50,000₤₤₤₤Revenue10500,00010500,000VariableCosts4200,0004200,000Contribution6300,0006300,000FixedCosts180,000205,000Profit120,00095,000BEP(Units)180000÷6=30000205000÷6=3416768Lesson3

Decision-makingbasedonMarginalCostMakeorbuyacomponent;Acceptorrejectanorder;Sellorprocessasemi-production69ThreecostsshouldbeconsideredRelevantCostsOpportunityCostsSunkCostRelevantcostsarefuture,differentialcoststhatcomeintoexistencewhenadecisionismade.Thevalueofthenextbestopportunitylostastheresultofpreferringthechosenalternativetotherejectedalternative.Itreferstocostswhichhavebeenoccurredinthepastandnon-recoverable.70相关成本是指对企业经营管理有影响或在经营管理决策分析时必须加以考虑的各种形式的成本。特点：每项选择的相关成本各不相同；发生在将来。沉没成本是指业已发生或承诺、无法回收的成本支出。沉没成本是一种历史成本。特点：是决策非相关成本71RelevantCostV.SIrrelevantCostInvestmentprojectA,theonlyconditiontocarryitonistopurchaseanequipmentB,thecostis₤20000.ourcompanyhasaspareequipmentC,thebookvalueis₤30000,butthemainfunctionsofChaveslightdifferencewithB,onlyifCwillbereconstructedthenitcanbeusedforInvestmentA,andthecostforthatis₤5000.Requirement:WhichdecisionshallwemaketocarryonprojectA.72SolutionSolutionA:ThecostofequipmentB=₤20000ThecostofequipmentC=₤30000＋₤5000=₤35000No,itisnottherightanswer.Correctsolution:ThecostofequipmentB=₤20000ThecostofequipmentC=₤5000IrrelevantCostmeanscostwhichdoesn’taffectthedecision.73HairLimitedhas₤5millionavailabletoinvest.thedirectorsareconsideringtwoalternativeprojects.Theprofitmargin,whichmaybeachievefromprojectAis10%peryearwhereasitisestimatedtheprojectBwillachieveraprofitmarginof8%.Bothprojectarecomparableineveryotherrespect.Requirement:WhattheopportunitycostforchoosingProjectA?andWhatisthenetbenefitforProjectA?74SolutionEstimatedprofitmarginfromprojectA₤500,000OpportunityCost₤400,000NetbenefitofProjectA₤100,00075MakeorBuyDecisionBravoLimitediscurrentlymakingacomponent,productnumberA1,BravoLimitedhassparecapacitytomakeA1andhasreceivedaquotefromDeltaLimitedwhowillmanufactureA1andofferanannualcontractwiththepriceof₤40000ayear.ThefollowingarecostdataofBravoLimited,accordingtothosedatacomparethetotalcostofMakingA1andtakingtheofferofDelta.76BravoLimitedEstimatedcostrelatedA1Materials₤14000Labour₤

12000VariableOverheads₤

3000FixedOverheads(Direct).ItwillstopiftakeofferfromDelta₤

6000FixedOverheads(Common).ItwillcontinueiftakeofferfromDelta.₤

1200077SolutionBravoLimitedEstimatedcostofmakingA1Materials₤14000Labour₤

12000VariableOverheads₤

3000FixedOverheads(Direct).ItwillstopiftakeofferfromDelta₤

6000TotalCost₤

35000ThecostofMakingA1byBravo:₤35000ThecostofTakingofferfromDelta:₤4000078IfwestillusethesamedatafromBravoLimitedandnowifBravoisworkingatfullcapacitytomakeA1whichwillrequirere-allocatelaboursource,thatcouldresultinthecontributionlossof₤7000.Requirement:ComparethecostofmakingA1andtakingofferfromDeltathenmakeyourdecision.79SolutionBravoLimitedcostofmakingA1infullcapacityMaterials₤14000Labour₤

12000VariableOverheads₤

3000FixedOverheads(Direct).ItwillstopiftakeofferfromDelta₤

6000Contributionlossfromotherwork₤7000TotalCost₤4200080SellorProcessFurtherDecisionOnecommoncharacteristic:Doingsomethingadditionalwithaviewtoaddingvaluetothefirm.Principlesfordecisionmaking:HigherprofityieldLoweropportunitycostoflosingtheprofitsassociatedwiththerejectedalternative.81ExampleWhiteCloudLimitedisacompanymanufacturingTshirt.EquipmentAisusedtoprintTshirt,becauseofthedisoperation,thequalityof400Tshirtsdoesn'tmeetthestandardduetowrongcolor,thecompanycaneitherdecisiontosalethemondiscountat₤4.5whichishalfoftheoriginalprice,orrehandlingthem,thevariablecostwillbe₤1.70perunitandotherrelevantcost₤240.Requirement:What’stheproperdecisionthemangerofWhiteCloudgoingtomake?82SolutionProcessFurtherSellondiscountRevenue:400×₤9.00＝₤3600400×₤4.50＝₤1800VariableCost:400×₤1.70＝₤680RelevantCost:₤240NetBenefit:₤2680₤1800Fromtheaboveanalysis,theproperdecisionisprocessingfurther.83Nelsonisaworldfamousmanufacturecompany,itsproduct-tyremainlyselltoFord,GM.Productsaremadethroughtwostages,thefollowingtableabstractdataforsingleproduct:SellingPriceperunit₤2850DirectMaterial:35kgat₤6perkg₤210DirectLabour:Stage150hoursat₤4/hour₤200Stage270hoursat₤7/hour₤490Production