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Preparing The Master Budget Sub-Accounts- Session TWO -
Section PageThe Revenue Budget 3The System of Budgets 12Budgets Set 1 14The Ending Finished Goods Inventory Budget 15The P...
Section PageBudget Set 3 41Intro to the Capital Budget 42Intro to the Financing Budget 43Intro to the Master Budget 44The ...
The Revenue Budget (8/9)Primarysources ofrevenueinfo.HistoricalsalesContractrestrictionsSalespromotionsSales ofexistingpro...
Budgets Set 1Once the revenue budget is in place, a number of additionalbudgets are derived from it that relate to the pro...
The Ending Finished Goods InventoryBudget (2/4)EndingInventoryAssumptionsCustomerserviceInventoryrecordaccuracyManufacturi...
The Manufacturing Overhead Budget (2/4)Expenses normallyconsidered part ofmanufacturingoverhead include:DepreciationFacili...
Sales and Marketing Budget (1/3)Sales & Marketing Budget is comprised ofSales & marketingstaffSales travel costsOther vari...
The Administration Budget (1/3)Administration Budget includesExecutivesexpensesAccountingexpensesTreasuryexpensesHR expens...
Intro to the Master Budget (2/2)(Details in session FOUR)Revenue BudgetProduction BudgetManufacturingOverhead BudgetCost o...
Operating Decisions Impacting The Systemof Budgets (1/7)Operatingdecisions that mayhave multipleimpacts on thebudget inclu...
Reasons for Budget IterationsSeveral goodreasons why the1st version of acorporate budgetis sent back foradditional workHis...
Thank You For Coming Today!Tel: +961 1 385 825 / website: www.bsf-lb.comEmail: info@bsf-lb.comFacilitator: Antoine Tabbakh...
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Budget-Building Fundamentals and Dynamics

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Budget-Building Fundamentals and Dynamics

  1. 1. Preparing The Master Budget Sub-Accounts- Session TWO -
  2. 2. Section PageThe Revenue Budget 3The System of Budgets 12Budgets Set 1 14The Ending Finished Goods Inventory Budget 15The Production Budget 18The Direct Labor Budget 20The Manufacturing Overhead Budget 23The Direct Material Budget 27The Cost of Goods Sold Budget 29Budget Set 2 31Sales and Marketing Budget 32The Administration Budget 35The Research and Development Budget 38Outline
  3. 3. Section PageBudget Set 3 41Intro to the Capital Budget 42Intro to the Financing Budget 43Intro to the Master Budget 44The System of Budgets - Conclusion 46The System of Budgets for a Multi-Division Co. 47Operating Decisions Impacting The System of Budgets 52Reasons for Budget Iterations 59Skewness of Budget Results 60Budget Scenarios 61Outline
  4. 4. The Revenue Budget (8/9)Primarysources ofrevenueinfo.HistoricalsalesContractrestrictionsSalespromotionsSales ofexistingproducts tonew regionsIncrementalproductsales
  5. 5. Budgets Set 1Once the revenue budget is in place, a number of additionalbudgets are derived from it that relate to the productioncapabilities of the company; production-related budgetsinclude:Ending inventorybudgetProduction budgetDirect labor budgetManufacturingoverhead budgetDirect materialsbudgetCost of goods soldbudget
  6. 6. The Ending Finished Goods InventoryBudget (2/4)EndingInventoryAssumptionsCustomerserviceInventoryrecordaccuracyManufacturingplanningProduct lifecycleSeasonal salesSupply chaindurationWorkingcapitalreduction
  7. 7. The Manufacturing Overhead Budget (2/4)Expenses normallyconsidered part ofmanufacturingoverhead include:DepreciationFacilities maintenanceFactory rentFactory utilitiesIndirect materials, such as suppliesInsurance on the factory & inventoryMaterials management staff compensationPersonal property taxes on manufacturing equipmentProduction employee payroll taxes & fringe benefitsProduction supervisor compensationQuality assurance staff compensation
  8. 8. Sales and Marketing Budget (1/3)Sales & Marketing Budget is comprised ofSales & marketingstaffSales travel costsOther variousmarketingprograms’expendituresSales and MarketingBudgetRevenue Budget
  9. 9. The Administration Budget (1/3)Administration Budget includesExecutivesexpensesAccountingexpensesTreasuryexpensesHR expensesAdministrationstaff expenses
  10. 10. Intro to the Master Budget (2/2)(Details in session FOUR)Revenue BudgetProduction BudgetManufacturingOverhead BudgetCost of Goods SoldBudgetBudgeted FinancialStatementsDirect LaborBudgetR&D BudgetCapital BudgetRevenueBudgetDirect MaterialsBudgetRevenueBudgetFinancingBudgetAdministrationBudget
  11. 11. Operating Decisions Impacting The Systemof Budgets (1/7)Operatingdecisions that mayhave multipleimpacts on thebudget include:Add new SalesterritoryIncrease/Decrease inInventoryLevelsRelax CredittermsIncrease/Decrease inPrices
  12. 12. Reasons for Budget IterationsSeveral goodreasons why the1st version of acorporate budgetis sent back foradditional workHistoricalmetricsFinancingPacingConstraints
  13. 13. Thank You For Coming Today!Tel: +961 1 385 825 / website: www.bsf-lb.comEmail: info@bsf-lb.comFacilitator: Antoine Tabbakh/BestSolutionFinance Company/bsf #bsfbeirut

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