BUDGETING
Jakarta, 13 April 2012
Agung K Sampurno
agung.sampurno@ai.astra.co.id
Daftar Pembahasan
Pengertian Budgeting Fungsi dan Jenis jenis
Budgeting
Kaitan Budgeting dengan
Company’s Strategic Objectives
Environmental analysis
Formulating company
objective and strategy
Operating budget: Analysis
into Quarters and Months
Faktor yang mempengaruhi
Budgeting
Operational Budgeting Capital Budgeting
Budget cycles and Outlook
Proses Budgeting di Astra Int’l
Penyusunan Budgeting
What is Budgeting ?
Suatu
perencanaan
proyeksi posisi keuangan
(forecast)
yang disusun untuk kegiatan
perusahaan di masa depan
Dinyatakan dalam satuan rupiah atau satuan
lain (kuantitas, %)
Digunakan sebagai alat pengendalian kegiatan
OVERVIEW:
OVERVIEW
Contoh: Sebuah Rencana
Perusahaan akan menjual sebanyak 10.000
mobil di th 2012, 2013 ... dst
Meraih pangsa pasar 50%
Membutuhkan biaya promosi ... milyar
Mebutuhkan tenaga marketing dan administrasi ... Orang
Rencana biaya produksi sebesar ...
Perlu membangun jaringan / cabang / investasi aktiva tetap ....
Dst ....
Strategi bisnis
•
Perumusan strategi
•
Perencanaan
strategi
• Penyusunan program dan aktivitas kerja
• Penyusunan anggaran
• Implementasi
• Pemantauan
Trend watching
Faktor mempengaruhi
penyusunan budget
Rumusan cara untuk memastikan tercapainya sasaran
Kondisi dapat yang membatasi untuk mencapai sasaran
Pertumbuhan ekonomi Inflasi
Anggaran yang perlu dibuat:
Anggaran Penjualan
Anggaran Produksi
Anggaran Bahan Baku
Anggaran Tenaga Kerja
Anggaran Biaya Overhead
Penyusunan Harga Pokok Produksi
Anggaran Biaya Administrasi Umum
Anggaran Piutang
Anggaran Kas
Perencanaan Anggaran
Perencanaan Anggaran (Budgeting) adalah: suatu
penentuan terlebih dahulu tentang: aktivitas atau kegiatan perusahaan (divisional atau departemental) yang akan
dilakukan di waktu yang akan datang
Why :
Perubahan bersifat ketidakpastian (uncertainty) Kompetisi bisnis
Pedoman kerja
Jenis Jenis Budgeting
Operational Budgeting:
Pembuatan proyeksi posisi keuangan perusahaan di masa yang akan datang, yang berupa Income statement dan Balance Sheet (proyeksi revenue, biaya, kas, piutang, persediaan, hutang dan lain lain)
Capital Expenditure Budgeting
Pembuatan proyeksi keuangan untuk keputusan investasi pada suatu aktiva tetap jangka panjang, misal: pembelian Tanah, Bangunan,
mesin-mesin produksi. Feasibility Study (FS) termasuk dalam
pengertian jenis ini.
Control
Steps taken by
management to
ensure that
objectives are
attained.
Planning
Developing
objectives for
acquisition
and use of
resources.
A budget is a comprehensive
financial
plan
for achieving the financial and
operational goals of an organization.
Flow of Budget Data
Supervisor Supervisor Middle
Management
Supervisor Supervisor Middle
Management Top Management
2001 2002 2003 2004
C a p i t a l B u d g e t s
A continuous budget is usually a twelve-month budget that adds one month as the current month is completed.
The annual operating budget may be divided into quarterly or monthly budgets.
Pasar Mobil Indonesia (jumlah unit) Des 2009 Des 2010 Des 2011 As of Maret 2012 MB Des 2012 MB Des 2013 Toyota 100.000 125.000 130.000 30.000 120.000 140.000
Daihatsu 50.000 45.000 66.000 12.000 71.000 80.000
Isuzu 50.000 40.000 70.000 15.000 77.000 85.000
BMW 1.000 1.100 1.300 125 1.000 1.300
% Market Share
Astra 45% 48% 55% 52% 57% 57%
Operational Budgeting
Definition
A detailed projection of
all estimated :
income and expenses
based on forecasted sales revenue during a given
period (usually one year).
It generally consists of several sub-budgets, the most
Operational Budgeting
Cakupan adalah sbb:
Anggaran Penjualan (Sales)
Anggaran Produksi (Production)
Anggaran Bahan Baku (Raw Material) Anggaran Tenaga Kerja (Manpower) Anggaran Biaya Overhead
Penyusunan Harga Pokok Produksi Anggaran Biaya Administrasi Umum Anggaran Piutang
Anggaran Kas
Sales forecast Production schedule Budgeted financial budgets:
cash income
balance sheet
Capital expenditures budget Operating expense budgets Cost of goods sold and ending
inventory budgets
That’s enough talking
about budgets, now
show me an example!
Sales
Budget
Estimated Unit Sales
Estimated Unit Price
Analysis of economic and market conditions
+
Forecasts of customer needs from marketing personnel, etc
Sales Forecasting
A sales forecast is a prediction of sales under a given set of conditions.
Sales forecasts are usually prepared under the direction of the top sales executive.
Cash Collections
It is easiest to prepare budgeted cash collections at the same
time as the sales budget.
Cash collections include the current month’s cash sales plus the
Purchases Budget and Cash
Disbursements
Budgeted purchases = Desired ending inventory
+ Cost of goods sold – Beginning inventory
Operating Expense Budget
The budgeting of operating expenses depends on several factors.
Month-to-month changes in sales volume and other cost-driver activities directly influence many operating expenses.
Other expenses are not influenced by sales or other cost-driver activity and are regarded
as fixed, within appropriate relevant ranges.
Rent
Insurance
Depreciation
Salaries
Operating Expense Disbursements
Disbursements for operating expenses are based on the operating expense budget.
Disbursements may include 50% of last month’s and this month’s wages and commissions plus miscellaneous and rent expenses.
Budgeted Income Statement
The income statement will be complete after addition of the interest expense,
which is computed after the cash budget has been prepared.
Budgeted income from operations is often a benchmark for judging
Siapa yang menyetujui Budget
•
Direktur Utama (President Director)
•
Direktur Keuangan (Finance Director)
Bagaimana apabila terjadi penyimpangan
dalam realisasi anggaran?
Budgeting Cycle: Activity
Budgeting Cycle: Reporting
OL1
Monthly Report & Review OL1 vs
Actual
MB N+1, OL2, Proj N+2, N+3 &/
N+4
Monthly Report & Review OL2 vs
Actual
OL3, Rev. MB N+1
Monthly Report & Review
OL3 vs Actual MB vs Actual
START: Agustus 201x
OL = Outlook
MB = Master Budget
Nov
Formulir budget
Act. Jan-Jul Ags-Dec OL2 MB Projection Projection Grand Total
700 Employee Compensation 701 Employee Welfare
702 Uniform
703 Training & Education 704 Jamsostek & Pension 705 Recruitment
706 Donations
707 Scholarship For 3Rd Parties 708 Representation & Entertainment 709 Transportation & Travelling 710 Research & Development 711 Advertising & Promotion 712 Repair & Maintenance 713 Fuel & Lubricant
714 Tools & Other Equipment 720 Utility & Energy
721 Communications 722 Office Expenses 724 Professional Fees
725 Trade And Prof. Associate 728 Tax & Licenses
729 Bank Charges 730 Rent Expense 731 Insurance Expense 732 Security Expense 740 Marketing & Publicity 799 Miscellaneous Expense A. Internal Charging
B. Depreciation & Amortization
Master Budget dan Outlook
Review before cut off (monthly)
Budget unrealized -> carry over / drop Actual realized > budget -> carry over (-)
Review after cut off (monthly)
Adjustment based on actual Additional activities
Activities for N+1 (monthly)
Formulir budget
Akun Opex Actual Outlook Plan Plan Plan Plan
Laporan budget: Neraca (1)
Project ion Project ion 31- Jul- 10 31- Agust - 10 30- Sep- 10 31- Okt - 10 30- Nop- 10 31- Des- 10 2011 2012 2013
kurs
A S S E T S : CURRENT ASSETS :
- Cash on hand & in Bank - Account Receivable
A/ R Related
A/ R third parties & Others - Prepaid Tax
- Prepaid Expenses - Advance Payments - Forex contract receiv.
Tot al Current Asset s
DUE FROM AFFCO & RELATED PARTIES INVESTMENT IN SHARES
PROPERTY, PLANT & EQ. DEFFERED TAX ASSETS OTHER ASSETS :
- Deffered charges - Goodwill
- Construction in Progress - Advances for purchase of stocks - Others
Tot al Ot her Asset s TOTAL ASSETS
Laporan budget: Neraca (2)
Project ion Project ion 31- Jul- 10 31- Agust - 10 30- Sep- 10 31- Okt - 10 30- Nop- 10 31- Des- 10 2011 2012 2013 LIABILITIES & SHAREHOLDERS' EQUITY
LIABILITIES
CURRENT LIABILITIES
- Short Term Loan - Customer Deposit - Account Payable
Subs. & ass. coys Others
- Dividen Payable - Accrued Expenses - Taxes Payable - Forex contract payable - Current maturities of LTD
Total Current Liabilities INTERCOMPANY ACCOUNTS DEFFERED TAX LIABILITIES DEFFERED INCOME
SHARESHOLDERS' EQUITY
- Capital Stock
- Capital paid in Excess of Par Value - Company - Paid in capital - security issuance cost - Paid in capital - Stock option - Paid in capital - Warrants - Paid in capital - Others
- Total Permanent Interbranch & Interunit - Excess of cost over equity in net asset of investee - Retained Earnings (Deficit)
TOTAL SHARESHOLDERS' EQUITY
TOTAL LIAB & SH' EQUITY
Laporan budget: Laba Rugi
OL2 MB Projection Projection 2010 2011 2012 2013
kurs
OPERATI NG EXPENSES
OTHER I NCOME ( CHARGES)
Equity income I nterest income
Gain (loss) on sale of fixed assets I nterest expenses
Gain (loss) on forex Commitment fees Amortization of goodwill Rental I ncome
Other I ncome (Charges)
Total Other I ncome (Charges) - net
PROFI T ( LOSS) BEFORE TAXES
PROVI SI ON FOR I NCOME TAX DEFFERED I NCOME TAX
NET I NCOME
BEGI NNI NG R/ E (DEFI CI T)
DI VI DEN AND TAX RECEI VED FROM SO DI VI DEN DECLARED
ENDI NG R/ E (DEFI CI T)
Agust - 10
Strategi bisnis
•
Perumusan strategi
•
Perencanaan
strategi
• Penyusunan program dan aktivitas kerja
• Penyusunan anggaran
• Implementasi
• Pemantauan
Trend watching
Faktor mempengaruhi
penyusunan budget
Rumusan cara untuk memastikan tercapainya sasaran
Kondisi dapat yang membatasi untuk mencapai sasaran
Pertumbuhan ekonomi Inflasi
Penganggaran Modal (Capital Expenditure Budgeting)
Modal (Capital) menunjukkan aktiva tetap yang digunakan
untuk produksi
Anggaran (budget) adalah sebuah rencana rinci yg
memproyeksikan aliran kas masuk dan aliran kas keluar selama beberapa periode pada saat yg akan datang.
Capital budget adalah garis besar rencana pengeluaran aktiva
tetap
Penganggaran modal (capital budgeting) adalah proses
Why Capital Budgeting is so
Important?
Involve massive investment of
resources
Are not easily reversible
Have long-term implications for the
firm
Involve uncertainty and risk for the
Pentingnya Penggangaran Modal
1.
Keputusan penggaran modal akan
berpengaruh pada jangka waktu yang lama
sehingga perusahaan kehilangan
fleksibilitasnya.
2.
Penanggaran modal yg efektif akan
menaikkan ketepatan waktu dan kualitas
dari penambahan aktiva.
Klasifikasi Proyek
1.
Replacement: perawatan bisnis
mengganti peralatan yg rusak
2.
Replacement: pengurangan biaya
mengganti peralatan yg sudah ketinggalan jaman
sehingga mengurangi biaya
3.
Ekspansi produk atau pasar yg sudah ada
pengeluaran2 untuk meningkatkan output produk
yg sudah ada atau menambah toko.
5.
Proyek keamanan atau lingkungan
6
. Penelitian dan pengembangan
7
. Kontrak2 jangka panjang
: kontrak untuk
menyediakan produk atau jasa pada
kustomer tertentu
SLIDE
TAHAP-TAHAP PENGANGGARAN MODAL
1. Biaya proyek harus ditentukan
2. Manajemen harus memperkirakan aliran kas yg
diharapkan dari proyek, termasuk nilai akhir aktiva
3. Risiko dari aliran kas proyek harus diestimasi.
(memakai distribusi probabilitas aliran kas)
4. Dengan mengetahui risiko dari proyek, manajemen
harus menentukan biaya modal (cost of capital) yg tepat untuk mendiskon aliran kas proyek
5. Dengan menggunakan nilai waktu uang, aliran kas
masuk yang diharapkan digunakan untuk memperkirakan nilai aktiva.
6. Terakhir, nilai sekarang dari aliran kas yg diharapkan
Important Concepts
1. A capital budgeting decision represents a long-term
investment decision
2. Cash flow rather than earning is used in capital
budgeting decision
3. The three methods of ranking investments are the
payback method, the internal rate of return, and net present value
4. The discount rate or cutoff rate is normally the cost of
capital
5. The tow primary cash inflows analyzed in a capital
UKURAN UNTUK KEPUTUSAN
PENGANGGARAN MODAL
1.
Payback period
2.
Net Present Value (NPV)
PAYBACK PERIOD (Periode Pengembalian)
Periode waktu yang menunjukkan berapa lama dana
yang diinvestasikan akan bisa kembali
Contoh:
Ca sh inflow s of $ 1 0 .0 0 0 inve st m e nt
Ye a r Pr oj e ct A Pr oj e ct B
Rumus:
Payback = tahun sebelum balik modal +biaya yang belum balik pada awal tahun/aliran kas pada tahun tsb
Proyek A payback period = 2 tahun
Proyek B payback period = 3.8 tahun
Payback Period
Jika payback period suatu investasi kurang dari
payback period yang disyaratkan, maka usulan
investasi layak diterima semua.
Masalah2 dgn payback period:
2. Metoda payback tidak mempertimbangkan
nilai waktu uang.
Proyek pertama lebih bagus karena
mendapatkan 9000 pada tahun pertama
I nvest m ent of $10.000
2. Net Present Value (NPV)
Adalah metode penilaian investasi yg
menggunakan discounted cash flow.
(mempertimbangkan nilai waktu uang pada
aliran kas yg terjadi)
Net Present Value - Present value of cash
flows minus initial investments.
Opportunity Cost of Capital - Expected rate
of return given up by investing in a
Net Present Value
Example
Suppose we can invest $50 today and receive $60 in
one year. What is our increase in value given a 10%
expected return?
This is the definition of NPV
Profit = -50 +
60
1.10
=
$4.55
Initial
Investment Added Value
Net Present Value
Rumus: NPV = PV - required investment
NPV
C
C
r
t t=
+
+
01
(
)
NPV
C
C
r
C
r
C
r
t t=
+
+
+
+
+ +
+
0 1 1 2 21
1
1
Net Present Value
Terminology
C = Cash Flow
t = time period of the investment
r = “opportunity cost of capital”
The Cash Flow could be positive or negative at any
Net Present Value
Net Present Value Rule
Managers increase shareholders’ wealth by
accepting all projects that are worth more than
they cost.
NPV
Example
Perusahaan anda mempunyai kesempatan untuk
membeli gedung kantor. Anda akan mempunyai
penyewa yang bersedia untuk membayar sebesar
Rp16 jt per tahun selama 3 tahun. Pada akhir
tahun ketiga anda memperkirakan akan bisa
menjual gedung kantor itu senilai Rp 450 juta.
Net Present Value
$16,000 $16,000
$16,000
$450,000 $466,000
0 1 2 3
Present Value
14,953
14,953
380,395
$409,323
Apabila gedung kantor itu ditawarkan untuk
dijual dengan harga Rp350 jt, apakah anda
akan membelinya? Dan berapa nilai tambah
(added value) yang dihasilkan oleh pembelian
anda? (dalam ribuan)
323
,
59
)
07
.
1
(
000
,
466
)
07
.
1
(
000
,
16
)
07
.
1
(
000
,
16
000
,
350
1 2 3Internal Rate of Return
Adalah tingkat discount (discount rate) yang menyamakan nilai
sekarang dari aliran kas yang akan terjadi (PV inflows) dengan nilai sekarang aliran kas keluar mula2 (PV investment cost)
PV (inflows) = PV (investment costs)
Atau
Internal Rate of Return (IRR) - Discount rate at which NPV = 0.
Mencari IRR dilakukan dengan prosedur coba2 (trial dan error)
Jadi, apabila present value terlalu rendah maka kita merendahkan IRR
Internal Rate of Return
Example
You can purchase a building for $350,000. The
investment will generate $16,000 in cash flows (i.e.
rent) during the first three years. At the end of
Internal Rate of Return
0
350 000
16 000
1
16 000
1
466 000
1
1 2 3
= −
+
+
+
+
+
+
,
,
(
)
,
(
)
,
(
)
IRR
IRR
IRR
IRR
Kriteria penerimaan:
Apabila suatu proyek mempunyai IRR lebih besar daripada biaya dana (cost of fund) maka proyek diterima.
Ini berarti proyek menguntungkan karena ada kelebihan dana bagi shareholder setelah dana yg dihasilkan proyek digunakan untuk membayar modal.
Perbandingan antara Metode NPV dan IRR
Apabila ada satu proyek yang independen maka NPV dan IRR akan selalu memberikan rekomendasi yang sama untuk menerima atau menolak usulan proyek tersebut.
Tapi apabila ada proyek2 yang mutually exclusive, NPV dan IRR tidak selalu memberikan rekomendasi yg sama.
Ini disebabkan oleh dua kondisi:
1. Ukuran proyek berbeda. Yg satu lebih besar daripada yg lain
2. Perbedaan waktu. Waktu dari aliran kas dari dua proyek berbeda.
Satu proyek aliran kasnya terjadi pada tahun2 awal sementara yg proyek yg lain aliran kasnya terjadi pada tahun2 akhir
Summary of Training
Summary
Bahan Referensi Tambahan
Production
Budget
Selling and
Administrative Expense
Budget
Selling expense budgets contain both variable
and fixed items.
Variable items: shipping costs and sales
commissions.
Fixed items: advertising and sales salaries.
Administrative expense budgets contain mostly
fixed items.
Executive salaries and depreciation on company
offices.
Variable selling and administrative expenses are
$.50 per unit
sold
and fixed selling and
administrative expenses are $70,000 per month.
Fixed selling and administrative expenses
include $10,000 in depreciation which does not
require a cash outflow.
April May June
Budgeted unit sales 20,000 50,000 30,000
Variable S&A per unit $ 0.50 $ 0.50 $ 0.50 Variable S&A expense $10,000 $25,000 $15,000 Fixed S&A expense 70,000 70,000 70,000 Total S&A expense $80,000 $95,000 $85,000 Deduct depreciation
S&A expense - cash
April May June
Budgeted unit sales 20,000 50,000 30,000
Variable S&A per unit $ 0.50 $ 0.50 $ 0.50 Variable S&A expense $10,000 $25,000 $15,000 Fixed S&A expense 70,000 70,000 70,000 Total S&A expense $80,000 $95,000 $85,000 Deduct depreciation 10,000 10,000 10,000 S&A expense - cash $70,000 $85,000 $75,000
I have seen a lot of cash
payments but no cash
receipts. Show me some
cash receipts!
All sales are on account.
Ellis’s collection pattern is:
70 percent collected in month of sale
25 percent collected in month after sale
5 percent will be uncollectible
Accounts receivable on March 31 is $30,000,
all of which is collectible.
April May June Budgeted unit sales 20,000 50,000 30,000 Price per unit $ 10 $ 10 $ 10 Budgeted sales revenue $200,000 $500,000 $300,000 Receipts from March sales $ 30,000
Receipts from April sales Receipts from May sales Receipts from June sales Total cash receipts
April May June Budgeted unit sales 20,000 50,000 30,000 Price per unit $ 10 $ 10 $ 10 Budgeted sales revenue $200,000 $500,000 $300,000 Receipts from March sales $ 30,000
Receipts from April sales 140,000 $ 50,000
Receipts from May sales Receipts from June sales
Total cash receipts $170,000
April: .70 × $200,000 = $140,000 and .25 × $200,000 = $50,000
April May June Budgeted unit sales 20,000 50,000 30,000 Price per unit $ 10 $ 10 $ 10 Budgeted sales revenue $200,000 $500,000 $300,000 Receipts from March sales $ 30,000
Receipts from April sales 140,000 $ 50,000
Receipts from May sales 350,000 $125,000 Receipts from June sales
Total cash receipts $170,000 $400,000
April: .70 × $200,000 = $140,000 and .25 × $200,000 = $50,000
May: .70 × $500,000 = $350,000 and .25 × $500,000 = $125,000
April May June Budgeted unit sales 20,000 50,000 30,000 Price per unit $ 10 $ 10 $ 10 Budgeted sales revenue $200,000 $500,000 $300,000 Receipts from March sales $ 30,000
Receipts from April sales 140,000 $ 50,000
Receipts from May sales 350,000 $125,000 Receipts from June sales 210,000
Total cash receipts $170,000 $400,000 $335,000
April: .70 × $200,000 = $140,000 and .25 × $200,000 = $50,000
May: .70 × $500,000 = $350,000 and .25 × $500,000 = $125,000
June: .70 × $300,000 = $210,000
With just a little more
information we will
be able to prepare a
comprehensive cash
budget.
Ellis Magnet Company:
Has a $100,000 line of credit at its bank, with a zero balance on April 1.
Maintains a $30,000 minimum cash balance.
Borrows at the beginning of a month and repays at the end of a month.
Pays interest at 16 percent when a principal payment is made.
Pays a $51,000 cash dividend in April.
Purchases equipment costing $143,700 in May and $48,800 in June.
Has a $40,000 cash balance on April 1.
Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000 Cash receipts
Cash available Cash payments:
Materials budget Labor budget
Manufacturing OH budget S&A expense budget
Equipment purchases Dividends
Total cash payments
Balance before financing Borrowing
Principal repayment Interest
Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000
Cash receipts 170,000 400,000 335,000
Cash available $210,000
Cash payments:
Materials budget Labor budget
Manufacturing OH budget S&A expense budget
Equipment purchases Dividends
Total cash payments
Balance before financing Borrowing
Principal repayment Interest
Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000
Cash receipts 170,000 400,000 335,000
Cash available $210,000
Cash payments:
Materials budget $ 40,000 $ 72,300 $ 72,700 Labor budget 13,000 23,000 14,500 Manufacturing OH budget 56,000 76,000 59,000 S&A expense budget 70,000 85,000 75,000 Equipment purchases 0 143,700 48,800
Dividends 51,000 0 0
Total cash payments $230,000 $400,000 $270,000
Balance before financing $ (20,000)
Borrowing
Principal repayment Interest
Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000 $ 30,000
Cash receipts 170,000 400,000 335,000
Cash available $210,000 $430,000
Cash payments:
Materials budget $ 40,000 $ 72,300 $ 72,700 Labor budget 13,000 23,000 14,500 Manufacturing OH budget 56,000 76,000 59,000 S&A expense budget 70,000 85,000 75,000 Equipment purchases 0 143,700 48,800
Dividends 51,000 0 0
Total cash payments $230,000 $400,000 $270,000
Balance before financing $ (20,000) $ 30,000
Borrowing 50,000
Principal repayment 0
Interest 0
Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000 $ 30,000 $ 30,000
Cash receipts 170,000 400,000 335,000
Cash available $210,000 $430,000 $365,000
Cash payments:
Materials budget $ 40,000 $ 72,300 $ 72,700 Labor budget 13,000 23,000 14,500 Manufacturing OH budget 56,000 76,000 59,000 S&A expense budget 70,000 85,000 75,000 Equipment purchases 0 143,700 48,800
Dividends 51,000 0 0
Total cash payments $230,000 $400,000 $270,000
Balance before financing $ (20,000) $ 30,000 $ 95,000
Borrowing 50,000 0
Principal repayment 0 0
Interest 0 0
Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000 $ 30,000 $ 30,000
Cash receipts 170,000 400,000 335,000
Cash available $210,000 $430,000 $365,000
Cash payments:
Materials budget $ 40,000 $ 72,300 $ 72,700 Labor budget 13,000 23,000 14,500 Manufacturing OH budget 56,000 76,000 59,000 S&A expense budget 70,000 85,000 75,000 Equipment purchases 0 143,700 48,800
Dividends 51,000 0 0
Total cash payments $230,000 $400,000 $270,000
Balance before financing $ (20,000) $ 30,000 $ 95,000
Borrowing 50,000 0 0
Principal repayment 0 0 (50,000)
Interest 0 0 (2,000)
Budgeted
Income
Statement
Cash
Budget
The Budgeted
Ellis Magnet Company
Budgeted Income Statement
For the Three Months Ended June 30
Sales (100,000 units @ $10) $ 1,000,000
The Budgeted
Ellis Magnet Company
Budgeted Income Statement
For the Three Months Ended June 30
Sales (100,000 units @ $10) $ 1,000,000
Cost of goods sold (100,000 @ $4.99) 499,000
Gross margin $ 501,000
Computation of unit cost follows
The Budgeted
Production costs per unit Quantity Cost Total
Direct materials 5.00 lbs. $ 0.40 $ 2.00
Direct labor 0.05 hrs. $ 10.00 0.50
Manufacturing overhead 0.05 hrs. $ 49.70 2.49
Total unit cost $ 4.99
Total mfg. OH for quarter $251,000
Total labor hours required 5,050 hrs. = $49.70 per hr.
From labor and Mfg. OH budgets
Labor Hours Mfg. OH
April 1,300 $ 76,000 May 2,300 96,000 June 1,450 79,000 Total 5,050 $251,000
Manufacturing overhead is applied
based on
direct labor hours.
The Budgeted
Ellis Magnet Company
Budgeted Income Statement
For the Three Months Ended June 30
Sales (100,000 units @ $10) $ 1,000,000
Cost of goods sold (100,000 @ $4.99) 499,000
Gross margin $ 501,000
Selling and administrative expenses 260,000
Operating income $ 241,000
From S&A Expense Budget
April $ 80,000
May 95,000
June 85,000
Total $260,000
The Budgeted
Ellis Magnet Company
Budgeted Income Statement
For the Three Months Ended June 30
Sales (100,000 units @ $10) $ 1,000,000
Cost of goods sold (100,000 @ $4.99) 499,000
Gross margin $ 501,000
Selling and administrative expenses 260,000
Operating income $ 241,000
Interest expense 2,000
Net income $ 239,000
The Budgeted
Budgeted
Balance
Sheet
Budgeted
Income
Statement
Ellis reports the following account balances on
June 30, prior to preparing its budgeted
financial statements:
Land - $50,000
Building (net) - $174,500
Common stock - $200,000
Equipment (net) - $192,500
Retained earnings - $148,150
Ellis Magnet Company Budgeted Balance Sheet
June 30, 2002
Current assets
Cash $ 43,000
Accounts receivable 75,000 Raw materials inventory 4,600 Finished goods inventory 24,950 Total current assets $ 147,550 Property and equipment
Land $ 50,000
Building 174,500
Equipment 192,500
Total property and equipment $ 417,000
Total assets $ 564,550
Liabilities and Equities
Accounts payable $ 28,400
Common stock 200,000
Retained earnings 336,150
Total liabilities and equities $ 564,550
25% of June sales of $300,000
11,500 lbs. @ $.40 per lb.
50% of June purchases
Ellis Magnet Company Budgeted Balance Sheet
June 30, 2002
Current assets
Cash $ 43,000
Accounts receivable 75,000 Raw materials inventory 4,600 Finished goods inventory 24,950 Total current assets $ 147,550 Property and equipment
Land $ 50,000
Building 174,500
Equipment 192,500
Total property and equipment $ 417,000
Total assets $ 564,550
Liabilities and Equities
Accounts payable $ 28,400
Common stock 200,000
Retained earnings 336,150
Total liabilities and equities $ 564,550
Beginning balance $148,150
Add: net income 239,000
Deduct: dividends (51,000)
