成本与管理会计9

Chapter

9BudgetingContentTopic

1

Basic

conceptions

of

BudgetTopic

2

The

MasterBudgetTopic

1

Basic

conceptions

of

Budget1.

A

budget

is

a

financial

or

quantitative

plan

ofoperations

for

forthcoming

account

period,that

specifies

how

resources

will

beacquired

and

used

during

a

specifiedperiod

of

time.AdvantagesCommunicatingplansThink

about

andplan

for

the

futureMeans

of

allocatingresourcesUncover

potentialbottlenecksCoordinateactivities2.

Advantage

of

budgetingDefine

goaland

objectivesTopic

1

Basic

conceptions

of

BudgetTopic

1

Basic

conceptions

of

Budget3.

Kinds

of

budgetsStatic

Budget

&Flexible

BudgetThe

Static

Budget

is

a

budget

designed

for

only

onelevel

of

activity.The

Flexible

Budget

is

a

budget

that

is

designed

tocovered

a

range

of

activity

within

the

relevant

rangeto

compare

to

actual

costs

incurred.Kinds

of

Budgets2009201020112012Continuous

orRolling

BudgetThis

budget

is

usually

a

twelve-monthbudget

that

rolls

forward

one

monthas

the

current

month

is

completed.L

o

n

gR

a

n

g

eB

u

d

g

e

t

sCapital

budgets

with

acquisitionsthat

normally

cover

several

years.StrategyLong-run

Planning(Strategic

plans)Long-run

BudgetsShort-run

Planning(Operating

plans)Short-run

Budgetsbudget-setting

processEstablish

responsibility

for

theCommunicate

budget

guidelines

torelevant

managersIdentify

the

key

or

limitingfactorPrepare

the

budget

for

thearea

of

the

limiting

factorPrepare

draft

budgets

for

allother

areasReview

and

co-ordinatebudgetsPrepare

the

master

budgetsCommunicate

the

budgets

toall

interested

partiesMonitor

actual

performancerelativetothe

budgetThere

is

a

sequence

of

events

in

thepreparation

of

the

budgets.

Once

the

budgets

areprepared,

they

are

communicated

to

all

interested

parties

and,

over

time,

actualperformance

is

monitored

in

relation

to

the

targets

set

out

in

the

budgets.4.

preparation

of

budgetsStep

1:

Establish

responsibility

for

the

budget-setting

processA

budget

committee

is

a

formed

tosupervise

and

take

responsibility

for

thebudget-setting

process.A

budget

officer

is

appointed

to

carry

out,

or

to

take

immediate

responsibility

for

others’

carrying

out,

the

tasks

of

the

committee.Step

2:

Communicate

budget

guidelines

to

relevantmanagersBudgetsareintended

to

be

the

short-termplans

that

seek

to

work

towards

theachievement

of

long-term

plans

and

to

theoverall

objectives

of

a

business.Step

3:

Prepare

the

budget

for

the

area

of

thelimiting

factorThe

limiting

factor

will

determine

the

overalllevel

of

activity

for

business.

The

limiting-factor

budget

will

quite

often

be

the

salesbudget.Step

5:

Prepare

draft

budgets

for

all

otherareasThere

are

two

broad

approaches

to

settingindividual

budgets:The

top-down

approachThe

bottom-up

approachStep

6:

Review

and

coordinate

budgetsA

business’

budget

committee

must

at

thisstage

review

the

various

budgets

an

satisfyitself

that

the

budgets

complement

oneanother.Step

7:

Prepare

the

master

budgetsThe

master

budgets

are

the

budgetedincome

statement,

budgeted

balance

sheet,and

perhaps

a

summarized,

budgeted

cashflow

statement.Step

8:

Communicate

the

budgets

to

all

interestedpartiesThe

formally-agreed

budgetsare

nowpassed

to

the

individual

managers

who

willbe

responsible

for

theirimplementation.Step

9:

Monitor

actual

performance

relative

tothe

budgetMuch

of

the

budget-setting

activity

will

havebeen

pointless

unless

each

manager’sactual

performance

is

compared

with

theplanned

performance

which

is

embodied

inthe

budget.Topic

2

The

Master

Budget③DirectMaterialsBudget⑥EndingInventoryBudget②ProductionBudget⑦Selling

andAdministrativeBudget④DirectLabourBudget⑤ManufacturingOverheadBudget①SalesBudget⑧CashBudget⑨

Budgeted

Income

Statements⑩

Budgeted

balance

sheet①The

Sales

BudgetDetailed

schedule

showing

expectedsales

for

the

coming

periodsexpressed

in

units

and

dollars.Budgeting

ExampleRoyal

Company

is

preparing

budgets

for

thequarter

ending

June

30.Budgeted

sales

for

the

next

five

months

are:AprilMayJuneJulyAugust20,000

units50,000

units30,000

units25,000

units15,000

units.The

selling

price

is

$10

per

unit.The

Sales

BudgetExpected

Cash

CollectionsAll

sales

are

on

account.Royal’s

collection

pattern

is:70%

collected

in

the

month

of

sale,25%

collected

in

the

month

following

sale,5%

is

uncollectible.The

March

31

accounts

receivablebalance

of

$30,000

will

be

collected

infull.Expected

Cash

CollectionsExpected

Cash

CollectionsFrom

salesbudgetExpected

Cash

CollectionsExpected

Cash

Collections②The

Production

BudgetSalesBudgetProductionBudgetCompletedProduction

must

be

adequate

to

meet

budgetedsales

and

provide

for

sufficient

ending

inventory.The

Production

BudgetRoyal

Company

wants

ending

inventoryto

beequalto

20%

of

the

followingmonth’s

budgeted

sales

in

units.On

March

31,

4,000

units

were

onhand.Let’s

prepare

the

production

budget.The

Production

BudgetBudgeted

sales50,000Desired

percent

20%Desired

inventory10,000The

Production

BudgetMarch

31ending

inventoryThe

Production

Budget20%The

Production

BudgetThe

Production

Budget③The

Direct

Materials

BudgetAt

Royal

Company,

five

kilograms

ofmaterialarerequired

per

unit

of

product.Management

wants

materials

on

hand

atthe

end

of

each

month

equalto

10%

ofthe

following

month’s

production.On

March

31,

13,000

kilograms

ofmaterial

are

on

hand.

Material

cost

is$0.40

per

kilogram.Let’s

prepare

the

direct

materials

budget.The

Direct

Materials

BudgetFrom

productionbudgetThe

Direct

Materials

BudgetThe

Direct

Materials

Budget10%

of

the

followingmonth’s

productionThe

Direct

Materials

BudgetMarch

31inventoryThe

Direct

Materials

BudgetThe

Direct

Materials

BudgetExpected

Cash

Disbursement

for

MaterialsRoyal

pays

$0.40

per

kilogram

for

itsmaterials.One-half

of

a

month’s

purchases

are

paid

for

in

the

month

of

purchase;

theotherhalf

is

paid

in

the

following

month.The

March

31

accounts

payable

balanceis

$12,000.Let’s

calculate

expected

cashdisbursements.Expected

Cash

Disbursement

for

MaterialsExpected

Cash

Disbursement

for

Materials140,000

kgs.

×

$.40/kg.

=

$56,000Expected

Cash

Disbursement

for

MaterialsExpected

Cash

Disbursement

for

Materials④The

Direct

Labour

BudgetAt

Royal,

each

unit

of

product

requires

0.05

hours

of

directlabour.The

Companyhasa

“no

layoff”

policy

so

all

employeeswill

be

paid

for

40

hours

of

work

each

week.In

exchange

for

the

“no

layoff”

policy,

workers

agreed

toa

wage

rate

of

$10

per

hour

regardless

of

the

hours

worked(No

overtime

pay).For

the

next

three

months,

the

direct

labour

workforce

willbe

paid

for

a

minimum

of

1,500

hours

per

month.Let’s

prepare

the

direct

labour

budget.The

Direct

Labour

BudgetFrom

productionbudgetThe

Direct

Labour

BudgetThe

Direct

Labour

BudgetHigher

of

labour

hours

requiredor

labour

hours

guaranteed.The

Direct

Labour

Budget⑤Manufacturing

Overhead

BudgetRoyal

Company

uses

a

variablemanufacturing

overhead

rate

of

$1

per

unitproduced.Fixed

manufacturing

overhead

is

$50,000

permonth

and

includes

$20,000

of

non-cashcosts

(primarily

depreciation

of

plantassets)Let’s

prepare

the

manufacturingoverhead

budget.Manufacturing

Overhead

BudgetFrom

productionbudgetManufacturing

Overhead

BudgetManufacturing

Overhead

BudgetDepreciation

is

a

non-cash

charge.⑥Ending

Finished

Inventory

BudgetNow,

Royal

can

complete

the

endingfinished

goods

inventory

budget.At

Royal,

manufacturing

overhead

isapplied

to

units

of

product

on

the

basis

ofdirect

labour

hours.Let’s

calculate

ending

finished

goodsinventory.Ending

Finished

Inventory

BudgetDirect

materialsbudget

and

informationEnding

Finished

Inventory

BudgetDirect

labourbudgetEnding

Finished

Inventory

BudgetTotal

mfg.

OH

for

quarterTotal

labour

hours

required5,050

hrs.$251,000

=

$49.70

per

hr.**roundedEnding

Finished

Inventory

BudgetProductionBudget⑦Selling

and

Administrative

Expense

BudgetAt

Royal,

variable

selling

and

administrative

expensesare

$0.50

per

unit

sold.Fixed

selling

and

administrative

expenses

are$70,000per

month.The

fixed

selling

and

administrative

expenses

include$10,000

in

costs

–

primarily

depreciation

–

that

arenot

cash

outflows

of

the

current

month.Let’s

prepare

thecompany’s

selling

andadministrative

expense

budget.Selling

and

Administrative

Expense

BudgetSelling

and

Administrative

Expense

Budget⑧The

Cash

BudgetRoyal:Maintains

a

16%

open

line-of-credit

for

$75,000.Maintains

a

minimum

cash

balance

of

$30,000.Borrows

on

the

first

day

of

the

month

and

repaysloans

on

the

last

day

of

the

month.Pays

a

cash

dividend

of

$49,000

in

April.Purchases

$143,700

of

equipment

in

May

and$48,300

in

June

paid

in

cash.Has

an

April

1

cash

balance

of

$40,000.The

Cash

BudgetSchedule

of

ExpectedCash

DisbursementsSchedule

of

ExpectedCash

CollectionsThe

Cash

BudgetDirect

LabourBudgetManufacturingOverhead

BudgetSelling

and

AdministrativeExpense

BudgetThe

Cash

BudgetBecause

Royal

maintainsa

cash

balance

of

$30,000,the

company

mustborrow

on

itsline-of-credit.Financing

and

RepaymentEnding

cash

balance

for

Aprilisthe

beginning

May

balance.The

Cash

BudgetFinancing

and

RepaymentBecause

the

ending

cash

balance

isexactly

$30,000,

Royal

will

not

repaythe

loan

this

month.The

Cash

BudgetThe

Cash

BudgetAt

the

end

of

June,

Royal

has

enough

cashto

repay

the

$50,000

loan

plus

interest

at

16%.Financing

and

Repayment$50,000

×

16%

×

3/12

=

$2,000Borrowings

on

April

1

andrepayment

of

June

30.⑨The

Budgeted

Income

StatementCashBudgetBudgetedIncomeStatementCompletedAfter

we

complete

the

cash

budget,we

can

prepare

the

budgeted

incomestatement

for

Royal.The

Budgeted

Income

Statement⑩The

Budgeted

Balance

SheetRoyal

reported

the

following

accountbalances

on