PROFIT PLANNING- BUDGETING. Read pg 376 Organize your business Determine when you need cash ...
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Transcript of PROFIT PLANNING- BUDGETING. Read pg 376 Organize your business Determine when you need cash ...
![Page 1: PROFIT PLANNING- BUDGETING. Read pg 376 Organize your business Determine when you need cash Baseline to judge how you are doing RoseBowl article.](https://reader035.fdocuments.in/reader035/viewer/2022062804/56649eec5503460f94bfe484/html5/thumbnails/1.jpg)
PROFIT PLANNING-BUDGETING
![Page 2: PROFIT PLANNING- BUDGETING. Read pg 376 Organize your business Determine when you need cash Baseline to judge how you are doing RoseBowl article.](https://reader035.fdocuments.in/reader035/viewer/2022062804/56649eec5503460f94bfe484/html5/thumbnails/2.jpg)
Read pg 376 Organize your business Determine when you need cash Baseline to judge how you are doing RoseBowl article
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Everyone needs to be involved. Should be created from the bottom up
not from the top down Handout about fraud
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10 Budgets – page 375 Exhibit 9-2 First – Sales – everything based on
these # Last – Balance Sheet
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1)Sales and 2)Cash Receipts 3)Production Cost of a product: 4)DM ,5)Cash Disb,
6)DL, 7)OH 8)Cost of Goods Manufactured: Unit
Product Cost -Book has Ending Finishing Goods Inventory –
9)Selling and Administrative 10)Cash 11)Income Statement 12)Balance Sheet
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*Sales in Units – determine by quarter
*x Sales Price = Total Sales
Information that will cause the change in the entire budget
* information you must enter Other numbers are calculated
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1st qtr 2nd qtr 3rd qtr 4th qtr TOTAL Sales
1st qtr Sales 70% 30%
2nd qtr Sales 70% 30%
3rd qtr Sales 70% 30%
4th qtr Sales 70%
TOTAl CASH Rec
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Sales in Units
+*Ending Inventory-FG (% of next quarter)
Total Needs - Less Beginning FG – last months
ending Required production
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Production in Units
*x Raw materials per unit = Production Needs
* +Production for E.I. --% of next quarter Total Needs -Less Beginning Raw Materials – from last
quarter
* X cost per pound Cost of Raw Materials to be purchased
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1st qtr 2nd qtr 3rd qtr 4th qtr TOTAL purch
1st qtr Pur 50% 50%
2nd qtr Pur 50% 50%
3rd qtr Pur 50% 50%
4th qtr Pur 50%
TOTAl CASH Dis
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Production in Units X hours per unit = DL Hours required X average rate =DL $
Use these numbers for overhead driver
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Variable Costs (per unit)
Fixed Costs ( same amount each month)
Estimated OH cost/estimated driver =Predetermined overhead rate
Selling and G&A same structure
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Combines all three product costs Direct Materials Budget +Direct Labor Budget +Overhead Budget =Total Manufacturing Cost + Beginning WIP -Ending WIP =Cost of Goods Mfg
DON’T USE PAGE 383 IN THE TEXTBOOK.
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Variable Costs (per unit)
Fixed Costs ( same amount each month)
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Beginning Cash +Cash Receipts Budget = Total Cash incoming
Cash Disbursement Budget +Direct Labor Budget +Overhead Budget +S G&A Budget = Total Cash outgoing
Cash incoming – Cash outgoing = Cash excess
-Minimum required balance = Cash Available
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Sales Budget -COGS
Beginning FG+COGM Budget -Ending FG
Gross Profit - Selling G&A Budget = Net Income
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Cash Budget A/R (Leftovers from Cash Receipts) Inventory (ending FG) Net Property,Plant & Equipment (estimate) =Total Assets A/P (leftovers from DM budget) Long Term Liabilities (estimate) =Total Liabilities Common Stock (estimate) Retained Earning (estimated) +Net Income from Income Statement = Stockholder’s Equity =Total Liabilities and Stockholder’s Equity
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See Manufacturing project instructions to create your groups fluid spreadsheet.