[日语学习]Acct Ch8 Budgeting Apr14.ppt

Chapter 1 - Scenario – Dentist in Distress! P. 208 Problems: IRS threats, missed payments, ongoing problems Actions: fires bookkeeper, hires local CPA firm Cause – lack of planning and control; poor spending decisions; poor repayments, lack of budgets Solutions – formal budget system to ensure proper planning, control, and performance evaluation. Homework: Wednesday, April 23 Exercise 8-2, (1,2,3) – Production Budget, Materials Budget Exercise 8-8 (1,2,3) – Performance Reporting, Behavioral Issues Sales Budget “Bottom-up approach” – Marketing / Sales to estimate considering economy, competition, advertising needs/funds, pricing, etc. Merely an estimate…. Must be approved by Executive management Seasonal fluctuations… Sales (Schedule 1) $57,000 Less: Cost of goods sold (Schedule 7) -39,617 Gross margin $17,383 Less: Selling and administrative expenses (Schedule 8) -8,660 Operating income $ 8,733 Less: Interest expense (Schedule 10) - 60 Income before taxes $ 8,673 Less: Income taxes (Schedule 10) -2,550 Net income $ 6,123 A static budget is a budget for a particular level of activity. A flexible budget is a budget that provides a firm with the capability to compute expected costs for a range of activity. F = Favorable variance U = Unfavorable variance Units produced 1,200 1,060 140 F The flexible budget can be used to prepare the budget before the fact for the expected level of activity. Flexible budgeting can be used to compute what costs should have been for the actual level of activity. Flexible budgeting can help managers deal with uncertainty by allowing them to see the expected outcomes for a range of activities. Goal congruence – all Dept / Mgr working for same goals Dysfunctional behavior – individual behavior conflicts Frequent feedback on performance – needed for corrections Monetary / nonmonetary incentives – reward good behavior Participative budgeting – everyone awa