c Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objective Describe budgeting, its objectives, and its impact on human behavior. 1
43
2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in par Student Version Student Version o Repetition is an important component, a key Repetition is an important component, a key part of learning. In memory, the more times part of learning. In memory, the more times patterns of thought are repeated, the more patterns of thought are repeated, the more likely you will be able to recall information. likely you will be able to recall information. o These PowerPoint slides have been modified These PowerPoint slides have been modified from the lecture decks by making them fill-in- from the lecture decks by making them fill-in- the-blank. Why? So that you get an the-blank. Why? So that you get an opportunity to repeat a visual cue (from the opportunity to repeat a visual cue (from the lecture or the book) via completing text here. lecture or the book) via completing text here. o In addition, most text book exhibits have been In addition, most text book exhibits have been removed as they are available in your text removed as they are available in your text directly. directly.
Transcript
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Student VersionStudent Version
o Repetition is an important component, a key Repetition is an important component, a key part of learning. In memory, the more times part of learning. In memory, the more times patterns of thought are repeated, the more patterns of thought are repeated, the more likely you will be able to recall information.likely you will be able to recall information.
o These PowerPoint slides have been modified These PowerPoint slides have been modified from the lecture decks by making them fill-in-from the lecture decks by making them fill-in-the-blank. Why? So that you get an the-blank. Why? So that you get an opportunity to repeat a visual cue (from the opportunity to repeat a visual cue (from the lecture or the book) via completing text here.lecture or the book) via completing text here.
o In addition, most text book exhibits have been In addition, most text book exhibits have been removed as they are available in your text removed as they are available in your text directly.directly.
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
BudgetingBudgeting
Chapter 21Chapter 21
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Learning Objective
ObjectiveDescribe budgeting, its
Describe budgeting, its
objectives, and its impact on
objectives, and its impact on human behavior.
human behavior.
11
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Nature and Objectives of BudgetingNature and Objectives of Budgeting
o _________ play an important role for _________ play an important role for organizations of all sizes and forms. For organizations of all sizes and forms. For example, _________ are used in _________ example, _________ are used in _________ the operations of _________ agencies, the operations of _________ agencies, _________ , _________ , small _________ , and _________ , _________ , small _________ , and _________ companies._________ companies.
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Objectives of BudgetingObjectives of Budgeting
o Budgeting involves:Budgeting involves: __________________________________________.__________________________________________. __________________________________________. __________________________________________. __________________________________________.__________________________________________.
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Objectives of BudgetingObjectives of Budgeting
o Budgeting affects the following managerial Budgeting affects the following managerial functions:functions: ____________________________________________________________________________________
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Objectives of BudgetingObjectives of Budgeting
o A budgetary unit of a company is called a A budgetary unit of a company is called a _________ _________ ._________ _________ .
o Each _________ _________ is led by a Each _________ _________ is led by a manager who has the _________ and manager who has the _________ and _________ for achieving the center’s _________ for achieving the center’s _________ goals._________ goals.
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Objectives of BudgetingObjectives of Budgeting
o As time passes, the _________ performance As time passes, the _________ performance of a responsibility center can be _________ of a responsibility center can be _________ against the _________ goals. This provides against the _________ goals. This provides prompt _________ to managers and prompt _________ to managers and employees about their performance.employees about their performance.
o If necessary, responsibility centers can use If necessary, responsibility centers can use such _________ to adjust their activities in such _________ to adjust their activities in the future.the future.
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Human Behavior and BudgetingHuman Behavior and Budgeting
o _________ _________ problems can arise in _________ _________ problems can arise in the budgeting process in the following the budgeting process in the following situations:situations: ____________________________________________________________________________________
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Human Behavior and BudgetingHuman Behavior and Budgeting
o Human behavior problems can arise in the Human behavior problems can arise in the budgeting process in the following budgeting process in the following situations:situations: ____________________________________________________________________________________
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Human Behavior and BudgetingHuman Behavior and Budgeting
o Human behavior problems can arise in the Human behavior problems can arise in the budgeting process in the following budgeting process in the following situations:situations: ____________________________________________________________________________________
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Learning Objective
ObjectiveDescribe the basic elements of the
Describe the basic elements of the
budget process, the two major
budget process, the two major
types of budgeting, and the use of
types of budgeting, and the use of computers in budgeting.
computers in budgeting.
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Budgeting SystemsBudgeting Systems
o The budgetary period for operating The budgetary period for operating activities normally includes the ________ activities normally includes the ________ ________ of a company.________ of a company.
o A variation of fiscal-year budgeting, called A variation of fiscal-year budgeting, called ________ ________ , maintains a 12-month ________ ________ , maintains a 12-month projection into the future.projection into the future.
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Budgeting SystemsBudgeting Systems
o Zero-basedZero-based ________ requires managers to ________ requires managers to ________ sales, production, and other ________ sales, production, and other operating data as though operations are operating data as though operations are being started for the ________ ________ .being started for the ________ ________ .
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Static BudgetStatic Budget
o A ________ budget shows the expected A ________ budget shows the expected results of a responsibility center for only results of a responsibility center for only ________ ________ ________ . The budget ________ ________ ________ . The budget ________ change even if the activity ________ change even if the activity changes.changes.
o A ________ budget is used by many service A ________ budget is used by many service companies and for some ________ functions companies and for some ________ functions of ________ companies.of ________ companies.
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Static BudgetStatic Budget
o The disadvantages of ________ budgets is The disadvantages of ________ budgets is that they do not adjust for changes in that they do not adjust for changes in ________ and ________ that occur as ________ and ________ that occur as ________ change.________ change.
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Flexible BudgetFlexible Budget
o ________ budgets show the expected ________ budgets show the expected results of a responsibility center for results of a responsibility center for several ________ ________ . several ________ ________ .
o A ________ budget is, in effect, a ________ of A ________ budget is, in effect, a ________ of static budgets for ________ levels of static budgets for ________ levels of ________ .________ .
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Learning Objective
ObjectiveDescribe the master budget for a
Describe the master budget for a manufacturing company.
manufacturing company.
33
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Master BudgetMaster Budget
o The ________ budget is an ________ set of The ________ budget is an ________ set of ________ , ________ , and ________ budgets ________ , ________ , and ________ budgets for a period of time.for a period of time.
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Master BudgetMaster Budgeto For a manufacturing company, the master For a manufacturing company, the master
budget consists of the following integrated budget consists of the following integrated budgets:budgets:
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Learning Objective
ObjectivePrepare the basic income
Prepare the basic income statement budgets for a
statement budgets for a manufacturing company.
manufacturing company.
44
INCOME INCOME STATEMENT STATEMENT BUDGETSBUDGETS
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Sales BudgetsSales Budgets
o The ________ budget begins by estimating The ________ budget begins by estimating the ________ of ________ . Once ________ the ________ of ________ . Once ________ ________ are estimated, the expected ________ are estimated, the expected ________ ________ can be determined by ________ ________ can be determined by multiplying the ________ by the expected multiplying the ________ by the expected unit ________ ________.unit ________ ________.
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Sales BudgetsSales Budgets
o The prior year’s sales quantities are The prior year’s sales quantities are revised for such factors as the following:revised for such factors as the following: ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________
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Production BudgetProduction Budget
o The ________ budget estimates the number The ________ budget estimates the number of ________ to be ________ to meet of ________ to be ________ to meet budgeted ________ and ________ ________ budgeted ________ and ________ ________ levels.levels.
________ Budget
________ units to be ________ +Desired units in ________ ________ – Estimated units in ________ ________
Total units to be ________
_______Budget
PRODUCTION PRODUCTION BUDGETBUDGET
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Direct Materials Purchases BudgetDirect Materials Purchases Budget
o The ________ ________ ________ budget The ________ ________ ________ budget estimates the ________ of ________ ________ estimates the ________ of ________ ________ to be purchased to support the ________ to be purchased to support the ________ ________ and desired ________ ________ .________ and desired ________ ________ .
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Direct Labor Cost BudgetDirect Labor Cost Budget
o The ________ ________ cost budget The ________ ________ cost budget estimates the ________ ________ ________ estimates the ________ ________ ________ and related cost needed to support and related cost needed to support budgeted production.budgeted production.
Production BudgetDirect Materials
Purchases Budget
________ ________ Cost Budget
SalesBudget
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o The ________ ________ cost budget The ________ ________ cost budget estimates the ________ for each ________ of estimates the ________ for each ________ of ________ ________ needed to support ________ ________ needed to support budgeted production.budgeted production.
Production BudgetDirect Materials
Purchases Budget
Direct LaborCost Budget
________ ________ Cost Budget
SalesBudget
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Cost of Goods Sold BudgetCost of Goods Sold Budget
o The ________ of ________ ________ budget is The ________ of ________ ________ budget is prepared by integrating the following prepared by integrating the following budgets:budgets: ________ ________ ________ budget________ ________ ________ budget ________ ________ cost budget________ ________ cost budget ________ ________ cost budget________ ________ cost budget
____ of ____ Sold Budget
Production BudgetDirect Materials
Purchases Budget
Direct LaborCost Budget
Factory OverheadCost Budget
SalesBudget
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Selling and Administrative Expenses Selling and Administrative Expenses BudgetBudgeto The ____ and _________ _________ budget is The ____ and _________ _________ budget is
normally supported by _________ normally supported by _________ schedules. The _________ budget is often schedules. The _________ budget is often used as the starting point for this budget.used as the starting point for this budget.
Production BudgetProduction BudgetDirect Materials
Purchases Budget
Direct LaborCost Budget
Factory OverheadCost Budget
Cost of GoodsSold Budget
_________ & _____________
_________Budget
SalesBudget
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Budgeted Income StatementBudgeted Income Statement
o The _________ _________ statement is The _________ _________ statement is prepared by integrating the following prepared by integrating the following budgets:budgets: _________ budget_________ budget _________ __ _________ _________ budget_________ __ _________ _________ budget _________ and _________ _________ budget_________ and _________ _________ budget
c. 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Learning Objective
ObjectivePrepare balance sheet budgets
Prepare balance sheet budgets
for a manufacturing company.
for a manufacturing company.
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Cash BudgetCash Budget
o The _________ budget estimates the The _________ budget estimates the expected _________ (inflows) and _________ expected _________ (inflows) and _________ (outflows) of cash for a _________ of (outflows) of cash for a _________ of _________._________.
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Estimated Cash Payments Estimated Cash Payments
o To estimate _________ _________ for To estimate _________ _________ for manufacturing costs, a schedule of manufacturing costs, a schedule of _________ for _________ _________ is _________ for _________ _________ is prepared.prepared.
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Capital Expenditures BudgetCapital Expenditures Budget
o The _________ _________ budget The _________ _________ budget summarizes plans for acquiring _________ summarizes plans for acquiring _________ _________ . Such expenditures are _________ . Such expenditures are necessary as _________ and other ________ necessary as _________ and other ________ _________ wear out or become _________._________ wear out or become _________.
o In addition, purchasing additional _________ In addition, purchasing additional _________ _________ may be necessary to meet _________ may be necessary to meet _________ _________ for the company’s _________ _________ for the company’s product.product.
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Budgeted Balance Sheet Budgeted Balance Sheet
o The _________ _________ sheet is prepared The _________ _________ sheet is prepared based on the _________ , _________ , and based on the _________ , _________ , and _________ budgets of the master budget. It _________ budgets of the master budget. It is similar to a _________ balance sheet is similar to a _________ balance sheet except that _________ amounts are used.except that _________ amounts are used.
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