Cash, sales, production

1. BUDGETARY CONTROL
GURUMOORTHI V
Asst. Professor

2.  Meaning of budget:-
 A budget is a monetary and quantitative expression
of business plan & polices to be pursued in the
future period of time.
 Definition of budget:-
 According to I.C.M.A defines ,budget as “A financial
of quantitative statement prepared prior to a defined
period of time of the policy to be purchased During
that period for the purpose of attaining the given
objective”.

3.  Meaning of budgeting;-
 Budgeting refers to the process of preparing the
budget.
 Meaning of budgetary control:-
 Budgetary control is the process of preparation of
budgets for various activities & comparing the
budget figures for arriving at deviations if any, which
are to be eliminated in future.

4. Objectives of Budgetary control:-
 →Planning
 →Co-ordination
 → Efficiency & economy
 → Increase in profitability
 → Anticipation of future & capital expenditure
 → Control
 → Deviations

5. Essential of successful budgetary
control:-
 →Top management support
 →Clearly defined organizational structure
 →Efficient accounting system
 →Reporting of deviations
 →Motivation
 →Realistic of targets
 →Participation of all department concern
 →Flexibility

6. CLASSIFICATION OF BUDGETS:-

7. 1.Sales budget:-
 A manufacturing company submit the following
figures of a product for the first quarter of 2006.
 Sales (units) Jan 30000
 Feb 25000
 Mar 35000
 Selling price per unit Rs.20
 Target price per unit Rs.200 %
 Sales quantity increase 10 %
 Sales price increase 10 %
 Prepare sales budget for the first quarter of 2007.

8. Sales budget:-
Months Units Priceper unit Value
Jan
Feb
Mar
33000
27500
38500
99000
22
22
22
7,26,000
6,05,000
8,47,000
21,78,000

9. Production Budget:-
Type of product Op.stock Estimate sales Closing stock
A
B
C
d
2000
3000
4000
5000
10000
15000
13000
12000
5000
4000
3000
2000

10. Production budget
Particular A(units) B(units) C(units) D(units)
Estimated
sales
10000 15000 13000 12000
Add:- closing
stock
5000 4000 3000 2000
15000 19000 16000 14000
Less:-opening
stock
Estimated
Production
2000
13000
3000
16000
4000
12000
5000
9000

11. Cash budget:-
Months sales Purchase Wages
Jan
Feb
Mar
Apr
60,000
40,000
45,000
40,000
48,000
45,000
31,000
40,000
5,000
5,000
5,000
5,000
Cash Balance on 1st Jan- Rs. 8000

12. Cash budget
Particular Jan Feb Mar Apr
Opening balance
Receipts:-
Cash sales
8,000
60,000
15,000
40,000
5,000
45,000
14,000
40,000
Total Receipts 68,000 55,000 50,000 54,000
Payments:-
Purchase
wages
Total payment
Closing cash balance
48,000
5,000
53,000
15,000
45,000
5,000
50,000
5,000
31,000
5,000
36,000
14,000
40,000
5,000
45,000
9,000

13. THANK YOU….