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Budgetary Control
A Budget is a financial and/or quantitative Statement, prepared prior to a defined period of time, of the policy to be pursued that period for the purpose
of attaining given Objective
Budget
Budgetary Control
Budgetary Control is the establishmentBudgetary Control is the establishmentof Budgets relating to the responsibilitiesof Budgets relating to the responsibilitiesof executives of a policy and the continuousof executives of a policy and the continuouscomparison of the actual with the budgetedcomparison of the actual with the budgetedresults, either to secure by individual actionresults, either to secure by individual actionthe objective of the policy or to provide the objective of the policy or to provide basis for its revisionbasis for its revision
Budgetary Control
Characteristics
Establishment of Budgets
Analysis Of Variation
Taking Remedial Action
Revision Of Budgets
Budgetary Control
OBJECTIVESOBJECTIVES
Planning
Motivation
Communication
Control
Co-ordination
PerformanceEvaluation
Budgetary Control
Preliminaries for InstallationPreliminaries for Installation
Creating Budget CentreCreating Budget Centre
Accounting RecordsAccounting Records
Organization Chart Organization Chart
Budget CommitteeBudget Committee
Budget ManualBudget Manual
Budget PeriodBudget Period
Key FactorKey Factor
SALES BUDGET
Functional Budgets
PRODUCTION BUDGET
SELLING & DISTRIBUTION
ADMINISTRATION
R & DEVELOPMENT BUDGET
PLANT UTILISATION
COST OF PRODUCTION
BUDGET
Material Labour Overheads
PRODUCTION BUDGET
Purchase
CASH BUDGET
PERFORMANCE BUDGET
ZERO BASED BUDGET
FIXED-VARIABLE BUDGETS
Capital Expenditure
Other Budgets
Capacity
Shortage of raw material
Skilled Labour
Working Capital Government restrictions
Sales (orders)
LABOUR HOURS
POWER SUPPLIERS
Key factor (limiting factor
SALES BUDGET
PRODUCTS TERRITORIES CUSTOMERS SALESMEN MONTH ….QUARTER
HISTORICAL ANALYSIS REPORTS BY SALESMEN MARKET ANALYSIS of BUSINESS CONDITIONS SPECIAL CONDITIONS
Sales Budget
Period Product A Product B Product C Total
Units Amt
Rs.30 P.U.
Units AmtRs.
40 P.U.
Units AmtRs.20 P.U
Amt
(Rs)
Jan
Feb
March
Total
I Q
IIQ
III Q
IV Q
4,000
4,500
5,000
13,500
12,000
16,000
15,000
1.20
1.35
1.50
4.05
3.60
4.80
4.50
5,000
6,000
5,000
16,000
18,000
20,000
16,000
2.00
2.40
2.00
6.40
7.20
8.20
6.40
10,000
8,000
7,000
25,000
30,000
32,000
28,000
2.00
1.60
1.40
5.00
6.00
6.40
5.60
5.20
5.35
4.90
15.45
16.80
19.20
16.50
Total 56,500 16.95 70,000 28 115000 23 67.95
SALES BUDGET
Budget Actual
Area Product Quantity Price Quantity
North A
B
10,000
6,000
10
5
11,500
7,000
South B 12,000 5 12,500
East A 15,000 10 16,500
West A
B
8,000
5,000
10
5
9,500
5,250
Sales Budget
Area Product Budget June 30, 05 Budget June 30,04 Actual June 30,03
Q P V Q P V Q P V
North
South
East
West
Total
A
B
12,000
6,500
10
5
12,0000
32,500
10,000
6,000
10
5
1,00,000
30,000
11,500
7,000
10
5
1,15,000
35,000
Total 18,500 1,52,500 16,000 1,30,000 18,500 1,50,000
A
B
3,000
13,000
10
5
30,000
65,000
--
12,000
--
5
--
60,000
--
12,500 5
--
62,500
Total 16,000 95,000 12,000 60,000 12,500 62,500
A
B
17,000
5,000
10
5
1,70,000
25,000
15,000
--
10
--
1,50,000
--
16,500
--
10
--
1,65,000
--
Total 22,000 1,95,000 15,000 1,50,000 16,500 1,65,000
A
B
9,000
5,500
10
5
90,000
27,500
8,000
5,000
10
5
80,000
25,000
9,500
5,250
10
5
95,000
26,250
Total 14,500 1,17,500 13,000 1,05,000 14,750 1,21,250
A
B
41,000
30,000
10
5
4,10,000
1,50,000
33,000
23,000
10
5
3,30,000
1,15,000
37,500
24,750
10
5
3,75,000
1,23,750
Total 71,000 5,60,000 56,000 4,45,000 62,250 4,98,750
PRODUCTION BUDGET
Sales Budget
Production Capacity
Stock Requirements
Products Manufacturing Departments
Months
BASED
UPON
CLASSIFIED
Production Budgets
Product A
Req. To Fulfill S. Prog. 41,000Forecast Cl. Stock 4,000
45,000
Fore cast op. stock 3,000 42,000
Add For Defectives 2 ½ % 1,050Quantity for Production 43,050
PRODUCTION BUDGET ….. JUNE 30,05
Jan :7050
Feb: 7000
Mar: 8000
Apr: 8000
May:8000
Jun: 5000
43,050
PRODUCTION BUDGET FOR THE YEAR
PRODUCTION SALES
(UNITS)
CLOSING
STOCK
(UNITS)
OPENING STOCK
(UNITS)
PRODUCTION BUDGET
(UNITS)
1+2=3
1 2 3 4
X
Y
Z
4800
2400
2400
800
400
400
600
300
800
5,000
2,500
2,000
Product Units Cost Centre A Cost Centre B
HRs. P.U.
Total M. Hrs.
No. of MAC.Req.
- - -
XYZ
5,0002,5002,000
2020030
1,50,0005,00,000
60,000
6020024
7010020
3,50,0002,50,000
40,000
14010016
7,10,000 284 6,40,000 256
MACHINE UTILIZATION BUDGET
PRODUCTION COST BUDGETPRODUCT
MACHINE
ITEMS OF MAT
MATERIAL
LABOUR F.O.H.
QT. REQ. FOR PRODUCTION
RATE P.U.
COST
OPERATION
GRADE
HOURS
HOUSRLY RATE
COST
DEPT.
COST
TOTAL COST
COST P. U.
A 1234
12
XY
B 123
12
Z
C 123
1 XYZ
Total
Production Cost Budgets
D. M.a.t. D. M. 11
D. M. 21
D. M. 31
D. Lab. DEPT. I
DEPT. II
DEPT. III
O. Variable cost
T. Variable Cost
Fixed Production OH.
DEPT. I (P.H. Rs)
DEPT. II (P. H. 3)
DEPT. III (P.H. 6)
Fixed P. O. H.
Product Cost
A.D. M. @ 20%
S. D. @ 40
Total Cost
Profit Selling price sales Qt.
A 15 Lakh /200
B. 10.80/216
C. 16.80 / 280
Products
A
Rs. P. Unit
B
Rs. P. Unit
C
Rs. P. Unit
10
-
5
-
40
5
24
36
-
15
10
12
3
45
5
4
6
60
5
6
9
25
10
15
20
20
15
50
20
18
12
80
10
6
24
95
10
9
36
50
100
20
40
40
120
24
48
55
150
30
60
160
40
192
24
240
40
200
7500
216
5000
280
6000
PRODUCTION BUDGET
A B C
Sales Quantities
(+) Closing Stock
(-) Opening Stock
7500
2400
3000
5000
1600
2000
6000
2000
2500
Production Quantities 6,900 4,600 5,500
Product
A ( 6,900X5: 6900x5)
B (4600x10: 4600x5)
C (5500X12:500x9)
DM 11 DM 21 DM 31
34,500
--
66,000
--
46,000
42,500
34,500
23,000
--
1,00,500 95,500 57,500
MATERIAL USAGE BUDGET
Materials
(+) Closing Stock
(-) Opening Stock
DM 11 DM 21 DM 31
100500
22050
24500
95500
18450
20500
57500
15750
17500
Purchase Units
Price P. Unit (Rs.)
Purchase (Value)
98,050
2
1,96,100
93,450
4
3,73,800
55,750
1
55,750
PURCHASE BUDGET
Cash Budget
Cash Budget is a detailed estimateof Cash Receipts from all sourcesand Cash Payments for all purposesand the resultant Cash Balance during the budget period
Cash Budget
Cash Budget For the Period…..Particulars Jan Feb Mar Total Rs Rs Rs RsOpening BalanceAdditions
Budgeted Net Profit Depreciations Provisions Sale Of Plants Issue Of Capital and Debentures Reduction in Debtors Reduction In stock Accrued Expenses Increase In Liabilities Total Additions Total Cash Available
Deductions Dividends Prepayments Capital Profit Increase in Stocks Increase in Debtors Decrease in Liabilities Total Deductions Cl Balance Of Cash
ZBB - applications
1 Identifying decision Units
2 Listing programmes, activities of each DU
3 Setting goals of activities of each DU
4 Identifying alternatives of activities
5 Designing Decision Package
6 Evaluating & Ranking each DP
7 Allocating Resources according to priority
ZBB -Cycle
Programmes &
ZBB –Decision Packages
1 Mutually Exclusive
2 Incremental
ZBB –Decision Packages
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