Kế toán, kiểm toán - Chapter 23: Master budgets and planning

Chapter 23MASTER BUDGETS AND PLANNINGCommunicatesmanagement plansthroughout theorganization.Provides a benchmarkfor evaluatingperformance.Promotes analysisand a focus onthe future.Converts long-termstrategic plans into short-term financialplans.Motivates employees throughparticipation in the budgeting processand the establishment of attainable goals. Enhances coordination so thatactivities of all units contribute tomeeting the company’s overall goals.BudgetProcessC 1Consists of managers from all departmentsof the organization.Provides central guidance to insure that individual budgets submitted from all departments are realistic and coordinated.BUDGET COMMITTEEC 1Flow of budget data is a bottom-up process.BUDGET COMMITTEEC 12009201020112012Operating BudgetThe annual operating budget may be divided into quarterlyor monthly budgets.BUDGET TIMINGA continuous or rolling budget is a twelve-month budget that rolls forward one month as thecurrent month is completed.C 1MASTER BUDGET COMPONENTSSalesbudgetMerchandisepurchasesPrepare financial budgets:CashIncome statementBalance sheetPreparecapitalexpenditurebudgetPrepareselling andgeneraladministrativebudgetsC 2SalesBudgetEstimatedUnit SalesEstimatedUnit PriceAnalysis of economic and market conditions+Forecasts of customer needs from marketing personnelSALES BUDGETP 1 The quantity purchased will be affected by: Just-in-time inventory systems that enable purchases of smaller, frequently delivered quantities.Safety stock inventory systems that provide protection against lost sales caused by delays in supplier shipments. MERCHANDISE PURCHASES BUDGETP 1Inventoryto bepurchased=Budgetedending inventory+Budgeted cost of salesfor the period–BudgetedbeginninginventoryMERCHANDISE PURCHASES BUDGETP 1CashBudgetExpectedReceiptsandDisbursementsBudgetedIncomeStatementBudgetedBalanceSheetFINANCIAL BUDGETSP 2CASH BUDGETP 2BeginningCashBalanceBudgetedCash ReceiptsBudgetedCash DisbursementsPreliminaryCashBalance+=– If adequate, repay loans or buy securities. If inadequate, increase short-term loans.Cash BudgetBudgetedIncomeStatementCompletedBUDGETED INCOME STATEMENTP 2BudgetedBalanceSheetCompletedBudgetedIncomeStatementBUDGETED BALANCE SHEETP 2ACTIVITY-BASED BUDGETING Activity-based budgeting is based on activities rather than traditional items such as salaries, supplies, depreciation, and utilities.A 1END OF CHAPTER 23