财务管理预算课件.ppt

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1、Work of Management PlanningControllingDirecting and MotivatingPlanning and ControllPlanning-involves developing objectives and preparing various budgets to achieve these objectives.lControl-involves the steps taken by management that attempt to ensure the objectives are attained.A.It uncovers potent

2、ial bottlenecks before they occur.B.It coordinates the activities of the entire organization by integrating the plans and objectives of the various parts.C.It ensures that accounting records comply with generally accepted accounting principles.D.It provides benchmarks for evaluating subsequent perfo

3、rmance.Which of the following is not a benefit of budgeting?Advantages of BudgetingAdvantagesCommunicatingplansThink about andplan for the futureMeans of allocatingresourcesUncover potentialbottlenecksCoordinateactivitiesDefine goaland objectivesResponsibility Accounting Managers should be held resp

4、onsible for those items and only those items thatthe manager can actually controlto a significant extent.Fairmont Inc.uses an accounting system that charges costs to the manager who has been delegated the authority to make decisions concerning the costs.For example,if the sales manager accepts a rus

5、h order that will result in higher than normal manufacturing costs,these additional costs are charged to the sales manager because the authority to accept or decline the rush order was given to the sales manager.This type of accounting system is known as:A)responsibility accounting.B)contribution ac

6、counting.C)absorption accounting.D)operational budgeting.Choosing the Budget PeriodOperating BudgetOperating Budget1999200020012002The annual operating budget may be divided into quarterlyor monthly budgets.Choosing the Budget Period1999200020012002Continuous or Continuous or Perpetual BudgetPerpetu

7、al BudgetThis budget is usually a twelve-month budget that rolls forward one month as the current month is completed.Participative Budget SystemFlow of Budget DataThe Budget CommitteeA standing committee responsible for voverall policy matters relating to the budgetvcoordinating the preparation of t

8、he budgetA method of budgeting in which the cost of each program must be justified every year is called:A)operational budgeting.B)zero-based budgeting.C)continuous budgeting.D)responsibility accounting.Zero-Base BudgetingManagers are required to justify all budgeted expenditures,not just changes in

9、the budget from the previous year.The baseline is zero rather than last years budget.Parlee Companys sales are 30%in cash and 70%on credit.Sixty percent of the credit sales are collected in the month of sale,25%in the month following sale,and 12%in the second month following sale.The remainder are u

10、ncollectible.The following are budgeted sales data:Total sales:January$60,000February$70,000March$50,000April$30,000Total cash receipts in April would be budgeted to be:A)$38,900.B)$47,900.C)$27,230.D)$36,230.Modesto Company produces and sells Product AlphaB.To guard against stockouts,the company re

11、quires that 20%of the next months sales be on hand at the end of each month.Budgeted sales of Product AlphaB over the next four months are:Budgeted sales in units JuneJulyAugustSeptember 30,000 40,000 60,000 50,000Budgeted production for August would be:A)62,000 units.B)70,000 units.C)58,000 units.D

12、)50,000 units.Friden Company has budgeted sales and production over the next quarter as follows:AprilMayJuneSales in units 100,000120,000?Production in units 104,000128,000156,000 The company has 20,000 units of product on hand at April 1.A minimum of 20%of the next months sales needs in units must

13、be on hand at the end of each month.July sales are expected to be 140,000 units.Budgeted sales for June would be(in units):A)188,000.B)160,000.C)128,000.D)184,000 Marple Companys budgeted production in units and budgeted raw materials purchases over the next three months are given below:JanuaryFebru

14、aryMarchBudgeted production(in units)60,000?100,000Budgeted raw materialspurchases(in kilograms)129,000165,000188,000Two kilograms of raw materials are required to produce one unit of product.The company wants raw materials on hand at the end of each month equal to 30%of the following months product

15、ion needs.The company is expected to have 36,000 kilograms of raw materials on hand on January 1.Budgeted production for February should be:A)105,000 units.B)82,500 units.C)150,000 units.D)75,000 units.Budgets can be defined as:“a quantitative model,or summary of the expected consequences of the org

16、anizations short-term operating activities.”Management AccountingAtkinson,Banker,Kaplan&YoungWhat is this definition implying?The definition suggests:lAvailability of quantitative data,lPredictability of short-term outcomes,lClear-cut organizational structures.There is one major logical problem,whic

17、h is?If the above are true,what do you need the budget for?The budgetary process is rather a processlTo quantify“qualitative”judgment,lTo forecast the impacts of some uncertain events,lTo simplify the complex organizational structures.As Zimmerman indicated(p.244),the budget processlis a communicati

18、on device involving both vertical and horizontal information transferlis a negotiation and internal contracting procedurelis part of the performance evaluation systemlpartition decision rightsBudgets to Solve“Agency”ProblemslShort-term budgets as internal contracts.vTo formally commit responsibility

19、 centersvAs a warning for future monitoring actionslLong-term budgets to reduce information asymmetry.vTo solicit private,specialized information from local managersvForce managers to think strategically,rather than on just the short-term resultsBudgets to Solve“Agency”ProblemslLine-item budgetsvAut

20、horize managers to spend only up to a certain amount per line itemvCannot transfer excess to and from line-itemsvNo incentive to reduce spendinglBudget lapsing no carryovers to next periodvIncentive to spend all the budgeted amountsvIntend to avoid managers building up slacks and smoothing performance over timeInternational Aspects of BudgetingMultinational companies face specialproblems when preparing a budget.vFluctuations in foreign currency exchange rates.vHigh inflation rates in some foreign countries.vDifferences in local economic conditions.vLocal governmental policies.