Copyright © The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin Noreen - Chapter 9 Profit Planning 利润预算

Copyright © The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin

Noreen - Chapter 9

Profit Planning

利润预算


9-2

Learning Objective 1

Understand why Understand why organizations budget and organizations budget and the processes they use to the processes they use to

create budgets.create budgets.


9-3 The Basic Framework of Budgeting预算的基本框架

A budget is a detailed quantitative plan for acquiring and using financial and other resources over a specified forthcoming time

period.

预算是一份以定量的形式表示的详细计划。它祥述了在一个特定期间内预算是一份以定量的形式表示的详细计划。它祥述了在一个特定期间内是如何获得与使用资源的。是如何获得与使用资源的。

1. The act of preparing a budget is called budgeting.

2. The use of budgets to control an organization’s activity is known as budgetary control. 预算控制


9-4 Planning and Control计划和控制

PlanningPlanning – – involves developing involves developing objectives and objectives and preparing various preparing various budgets to achieve budgets to achieve these objectivesthese objectives..

计划计划——包括建立目标和准包括建立目标和准备达到目标的各种预算。备达到目标的各种预算。

PlanningPlanning – – involves developing involves developing objectives and objectives and preparing various preparing various budgets to achieve budgets to achieve these objectivesthese objectives..

计划计划——包括建立目标和准包括建立目标和准备达到目标的各种预算。备达到目标的各种预算。

ControlControl – – involves the steps involves the steps taken by management taken by management that attempt to ensure that attempt to ensure the objectives are the objectives are attained.attained.

控制控制——包括管理方确保目包括管理方确保目标达成采取的步骤。标达成采取的步骤。

ControlControl – – involves the steps involves the steps taken by management taken by management that attempt to ensure that attempt to ensure the objectives are the objectives are attained.attained.

控制控制——包括管理方确保目包括管理方确保目标达成采取的步骤。标达成采取的步骤。


9-5 Advantages of Budgeting预算的优点

Advantages

Define goalDefine goaland objectivesand objectives

订立目标订立目标

Uncover potentialUncover potentialBBottlenecksottlenecks

发现可能的瓶颈发现可能的瓶颈

CoordinateCoordinateAActivitiesctivities协调行为协调行为

CommunicateCommunicatePPlanslans

交流计划交流计划

Think about andThink about andplan for the futureplan for the future为将来思考和计划为将来思考和计划

Means of allocatingMeans of allocatingRResourcesesources

分配资源的手段分配资源的手段


9-6 Responsibility Accounting责任会计

Managers should be held responsible for those items Managers should be held responsible for those items — and — and onlyonly those items — that those items — that

the manager can actually controlthe manager can actually controlto a significant extent.to a significant extent.

经理人应该对，并且只对，那些他们能在很大程度上控经理人应该对，并且只对，那些他们能在很大程度上控制的项目负责。制的项目负责。

Managers should be held responsible for those items Managers should be held responsible for those items — and — and onlyonly those items — that those items — that

the manager can actually controlthe manager can actually controlto a significant extent.to a significant extent.

经理人应该对，并且只对，那些他们能在很大程度上控经理人应该对，并且只对，那些他们能在很大程度上控制的项目负责。制的项目负责。


9-7 Choosing the Budget Period选择预算期间

Operating BudgetOperating Budget 经营预算经营预算

2005 2006 2007 2008

The annual operating budget The annual operating budget may be divided into quarterlymay be divided into quarterly

or monthly budgets.or monthly budgets.可以分成季度或月度预算可以分成季度或月度预算

The annual operating budget The annual operating budget may be divided into quarterlymay be divided into quarterly

or monthly budgets.or monthly budgets.可以分成季度或月度预算可以分成季度或月度预算

A continuous budget is aA continuous budget is a12-month budget that rolls12-month budget that rolls

forward one month (or quarter)forward one month (or quarter)as the current month (or quarter)as the current month (or quarter)

is completed.is completed.连续预算是对连续预算是对 1212 个月的预算，个月的预算，

当前月（季度）完成时，该预算向前当前月（季度）完成时，该预算向前推进一个月（季度）。推进一个月（季度）。

A continuous budget is aA continuous budget is a12-month budget that rolls12-month budget that rolls

forward one month (or quarter)forward one month (or quarter)as the current month (or quarter)as the current month (or quarter)

is completed.is completed.连续预算是对连续预算是对 1212 个月的预算，个月的预算，

当前月（季度）完成时，该预算向前当前月（季度）完成时，该预算向前推进一个月（季度）。推进一个月（季度）。


9-8

Self-Imposed Budget

A budget is prepared with the full cooperation andA budget is prepared with the full cooperation andparticipation of managers at all levels. A participativeparticipation of managers at all levels. A participative

budget is also known as a budget is also known as a self-imposed budgetself-imposed budget..在各级经理人的全面合作和参与的情况下编制的。在各级经理人的全面合作和参与的情况下编制的。

S u p erviso r S u p erviso r

M id d leM an ag em en t

S u p erviso r S u p erviso r

M id d leM an ag em en t

Top M an ag em en t


9-9

Advantages of Self-Imposed Budgets

1.1. Individuals at all levels of the organization are viewed Individuals at all levels of the organization are viewed as members of the team whose judgments are valued as members of the team whose judgments are valued by top management.by top management.

2.2. Budget estimates prepared by front-line managers Budget estimates prepared by front-line managers （一（一线经理人）线经理人） are often more accurate than estimates are often more accurate than estimates prepared by top managers.prepared by top managers.

3.3. Motivation Motivation （动力）（动力） is generally higher when is generally higher when individuals participate in setting their own goals than individuals participate in setting their own goals than when the goals are imposed from abovewhen the goals are imposed from above （目标由上级（目标由上级给定）给定） ..

4.4. A manager who is not able to meet a budget imposed A manager who is not able to meet a budget imposed from above can claim that it was unrealisticfrom above can claim that it was unrealistic （不实（不实际）际） . Self-imposed budgets eliminate this excuse.. Self-imposed budgets eliminate this excuse.

1.1. Individuals at all levels of the organization are viewed Individuals at all levels of the organization are viewed as members of the team whose judgments are valued as members of the team whose judgments are valued by top management.by top management.

2.2. Budget estimates prepared by front-line managers Budget estimates prepared by front-line managers （一（一线经理人）线经理人） are often more accurate than estimates are often more accurate than estimates prepared by top managers.prepared by top managers.

3.3. Motivation Motivation （动力）（动力） is generally higher when is generally higher when individuals participate in setting their own goals than individuals participate in setting their own goals than when the goals are imposed from abovewhen the goals are imposed from above （目标由上级（目标由上级给定）给定） ..

4.4. A manager who is not able to meet a budget imposed A manager who is not able to meet a budget imposed from above can claim that it was unrealisticfrom above can claim that it was unrealistic （不实（不实际）际） . Self-imposed budgets eliminate this excuse.. Self-imposed budgets eliminate this excuse.


9-10

Self-Imposed Budgets

Most companies do not rely exclusively Most companies do not rely exclusively （不仅限于依（不仅限于依赖）赖） upon self-imposed budgets in the sense that top upon self-imposed budgets in the sense that top

managers usually initiatemanagers usually initiate （发起）（发起） the budget process the budget process by issuing broad guidelines in terms of overall profits or by issuing broad guidelines in terms of overall profits or

salessales （以总利润和销售额作为大体的指引）（以总利润和销售额作为大体的指引） ..

Most companies do not rely exclusively Most companies do not rely exclusively （不仅限于依（不仅限于依赖）赖） upon self-imposed budgets in the sense that top upon self-imposed budgets in the sense that top

managers usually initiatemanagers usually initiate （发起）（发起） the budget process the budget process by issuing broad guidelines in terms of overall profits or by issuing broad guidelines in terms of overall profits or

salessales （以总利润和销售额作为大体的指引）（以总利润和销售额作为大体的指引） ..


9-11 Human Factors in Budgeting预算中的人的因素

The success of budgeting depends upon three important The success of budgeting depends upon three important factors:factors:

1.1. Top management must be enthusiastic and committed to Top management must be enthusiastic and committed to the budget processthe budget process （热情和投身到预算过程中去）（热情和投身到预算过程中去） ..

2.2. Top management must not use the budget to pressure Top management must not use the budget to pressure employees or blame them when something goes wrongemployees or blame them when something goes wrong （给员工施压或在出问题的时候责备他们）（给员工施压或在出问题的时候责备他们） ..

3.3. Highly achievable budget targetsHighly achievable budget targets （达成性很高的预算目（达成性很高的预算目标）标） are usually preferred when managers are rewarded are usually preferred when managers are rewarded based on meeting budget targets.based on meeting budget targets.

The success of budgeting depends upon three important The success of budgeting depends upon three important factors:factors:

1.1. Top management must be enthusiastic and committed to Top management must be enthusiastic and committed to the budget processthe budget process （热情和投身到预算过程中去）（热情和投身到预算过程中去） ..

2.2. Top management must not use the budget to pressure Top management must not use the budget to pressure employees or blame them when something goes wrongemployees or blame them when something goes wrong （给员工施压或在出问题的时候责备他们）（给员工施压或在出问题的时候责备他们） ..

3.3. Highly achievable budget targetsHighly achievable budget targets （达成性很高的预算目（达成性很高的预算目标）标） are usually preferred when managers are rewarded are usually preferred when managers are rewarded based on meeting budget targets.based on meeting budget targets.


9-12 The Budget Committee预算委员会

A standing committee responsible for A standing committee responsible for overall policy matters relating to the overall policy matters relating to the

budgetbudget 与预算有关的大体政策事务与预算有关的大体政策事务 coordinating the preparation of the coordinating the preparation of the

budgetbudget 协调预算的编制协调预算的编制

A standing committee responsible for A standing committee responsible for overall policy matters relating to the overall policy matters relating to the

budgetbudget 与预算有关的大体政策事务与预算有关的大体政策事务 coordinating the preparation of the coordinating the preparation of the

budgetbudget 协调预算的编制协调预算的编制


9-13 The Master Budget: An Overview总预算：概述

ProductionBudget生产预算

ProductionBudget生产预算

Selling andAdministrative

Budget销售和行政费用预算

Selling andAdministrative

Budget销售和行政费用预算

DirectMaterialsBudget

直接材料预算

DirectMaterialsBudget

直接材料预算

ManufacturingOverhead

Budget制造费用预算

ManufacturingOverhead

Budget制造费用预算

DirectLabor

Budget直接人工预算

DirectLabor

Budget直接人工预算

CashBudget现金预算

CashBudget现金预算

SalesBudget销售预算

SalesBudget销售预算

Budgeted Financial StatementsBudgeted Financial Statements预算财务报表预算财务报表

Budgeted Financial StatementsBudgeted Financial Statements预算财务报表预算财务报表

EndingFinished GoodsBudget

期末产成品预算

EndingFinished GoodsBudget

期末产成品预算


9-14


Prepare a sales budget, Prepare a sales budget, including a schedule of including a schedule of

expected cash collections.expected cash collections.


9-15

Budgeting Example

Royal Company is preparing budgets for the Royal Company is preparing budgets for the quarter ending June 30.quarter ending June 30.

Budgeted sales for the next five months are:Budgeted sales for the next five months are: April April 20,000 units20,000 units May May 50,000 units50,000 units June June 30,000 units30,000 units July July 25,000 units25,000 units August August 15,000 units.15,000 units.

The selling price is $10 per unit.The selling price is $10 per unit.

Royal Company is preparing budgets for the Royal Company is preparing budgets for the quarter ending June 30.quarter ending June 30.

Budgeted sales for the next five months are:Budgeted sales for the next five months are: April April 20,000 units20,000 units May May 50,000 units50,000 units June June 30,000 units30,000 units July July 25,000 units25,000 units August August 15,000 units.15,000 units.

The selling price is $10 per unit.The selling price is $10 per unit.


9-16

The Sales Budget 销售预算

The individual months of April, May, and June are summed to obtain the total projected sales in units

and dollars for the quarter ended June 30th


9-17 Expected Cash Collections预计的现金收回

• All sales are on account.All sales are on account.• Royal’s collection pattern is:Royal’s collection pattern is:

70% collected in the month of sale,70% collected in the month of sale, 25% collected in the month following sale,25% collected in the month following sale, 5% uncollectible.5% uncollectible.

• The March 31 accounts receivable balance of The March 31 accounts receivable balance of $30,000 will be collected in full.$30,000 will be collected in full.

• All sales are on account.All sales are on account.• Royal’s collection pattern is:Royal’s collection pattern is:

70% collected in the month of sale,70% collected in the month of sale, 25% collected in the month following sale,25% collected in the month following sale, 5% uncollectible.5% uncollectible.

• The March 31 accounts receivable balance of The March 31 accounts receivable balance of $30,000 will be collected in full.$30,000 will be collected in full.


9-18

Expected Cash Collections


9-19


From the Sales Budget for April.From the Sales Budget for April.From the Sales Budget for April.From the Sales Budget for April.


9-20


From the Sales Budget for May.From the Sales Budget for May.From the Sales Budget for May.From the Sales Budget for May.


9-21

Quick Check

What will be the total cash collections for the What will be the total cash collections for the quarter? quarter?

a. $700,000a. $700,000

b. $220,000b. $220,000

c. $190,000c. $190,000

d. $905,000d. $905,000


a. $700,000a. $700,000

b. $220,000b. $220,000

c. $190,000c. $190,000

d. $905,000d. $905,000


9-22


a. $700,000a. $700,000

b. $220,000b. $220,000

c. $190,000c. $190,000

d. $905,000d. $905,000


a. $700,000a. $700,000

b. $220,000b. $220,000

c. $190,000c. $190,000

d. $905,000d. $905,000

Quick Check


9-23



9-24


Prepare a Prepare a production budget.production budget.


9-25

The Production Budget 生产预算

ProductionProductionBudgetBudget

Sales Sales BudgetBudget

andandExpectedExpected

CashCashCollectionsCollections

Complete

d

Production must be adequate to meet budgetedProduction must be adequate to meet budgetedsales and provide for sufficient ending inventory.sales and provide for sufficient ending inventory.

产量必须足够达到销售预算的需要并提供充足的期末存货产量必须足够达到销售预算的需要并提供充足的期末存货


9-26

The Production Budget

• The management at Royal Company wants The management at Royal Company wants ending inventory to be equal to ending inventory to be equal to 20%20% of the of the following month’s budgeted sales in units.following month’s budgeted sales in units.

• On March 31, 4,000 units were on hand.On March 31, 4,000 units were on hand.

Let’s prepare the production budget.Let’s prepare the production budget.

• The management at Royal Company wants The management at Royal Company wants ending inventory to be equal to ending inventory to be equal to 20%20% of the of the following month’s budgeted sales in units.following month’s budgeted sales in units.

• On March 31, 4,000 units were on hand.On March 31, 4,000 units were on hand.

Let’s prepare the production budget.Let’s prepare the production budget.


9-27



9-28


March 31March 31ending inventoryending inventory

March 31March 31ending inventoryending inventory

Budgeted May sales 50,000

Desired ending inventory % 20%Desired ending inventory 10,000


9-29

Quick Check

What is the required production for May? What is the required production for May?

a. 56,000 unitsa. 56,000 units

b. 46,000 unitsb. 46,000 units

c. 62,000 unitsc. 62,000 units

d. 52,000 unitsd. 52,000 units







9-30











Quick Check


9-31



9-32


Assumed ending inventory.Assumed ending inventory.Assumed ending inventory.Assumed ending inventory.


9-33


Prepare a direct materials Prepare a direct materials budget, including a budget, including a

schedule of expected cash schedule of expected cash disbursements for disbursements for

purchases of materials.purchases of materials.


9-34 The Direct Materials Budget直接材料预算

• At Royal Company, At Royal Company, five poundsfive pounds of material of material are required per unit of product.are required per unit of product.

• Management wants materials on hand at Management wants materials on hand at the end of each month equal to the end of each month equal to 10%10% of the of the following month’s production.following month’s production.

• On March 31, 13,000 pounds of material On March 31, 13,000 pounds of material are on hand. Material cost is are on hand. Material cost is $0.40$0.40 per per pound.pound. Let’s prepare the direct materials budget.Let’s prepare the direct materials budget.

• At Royal Company, At Royal Company, five poundsfive pounds of material of material are required per unit of product.are required per unit of product.

• Management wants materials on hand at Management wants materials on hand at the end of each month equal to the end of each month equal to 10%10% of the of the following month’s production.following month’s production.

• On March 31, 13,000 pounds of material On March 31, 13,000 pounds of material are on hand. Material cost is are on hand. Material cost is $0.40$0.40 per per pound.pound. Let’s prepare the direct materials budget.Let’s prepare the direct materials budget.


9-35

The Direct Materials Budget

From production budgetFrom production budgetFrom production budgetFrom production budget


9-36



9-37


Calculate the materials toCalculate the materials tobe purchased in May.be purchased in May.

March 31 inventoryMarch 31 inventoryMarch 31 inventoryMarch 31 inventory

10% of following month’s production needs.

10% of following month’s production needs.


9-38

Quick Check

How much materials should be purchased in May? How much materials should be purchased in May?

a. 221,500 poundsa. 221,500 pounds

b. 240,000 poundsb. 240,000 pounds

c. 230,000 poundsc. 230,000 pounds

d. 211,500 poundsd. 211,500 pounds







9-39











Quick Check


9-40



9-41


Assumed ending inventoryAssumed ending inventoryAssumed ending inventoryAssumed ending inventory


9-42 Expected Cash Disbursement for Materials预计的关于材料的现金支出

• Royal pays Royal pays $0.40 per pound$0.40 per pound for its materials. for its materials.

• One-half One-half of a month’s purchases is paid for in of a month’s purchases is paid for in the month of purchase; the other half is paid the month of purchase; the other half is paid in the following month.in the following month.

• The March 31 accounts payable balance is The March 31 accounts payable balance is $12,000.$12,000.

Let’s calculate expected cash disbursements.Let’s calculate expected cash disbursements.

• Royal pays Royal pays $0.40 per pound$0.40 per pound for its materials. for its materials.

• One-half One-half of a month’s purchases is paid for in of a month’s purchases is paid for in the month of purchase; the other half is paid the month of purchase; the other half is paid in the following month.in the following month.

• The March 31 accounts payable balance is The March 31 accounts payable balance is $12,000.$12,000.

Let’s calculate expected cash disbursements.Let’s calculate expected cash disbursements.


9-43

Expected Cash Disbursement for Materials


9-44


140,000 lbs. × $.40/lb. = $56,000140,000 lbs. × $.40/lb. = $56,000140,000 lbs. × $.40/lb. = $56,000140,000 lbs. × $.40/lb. = $56,000

Compute the expected cashCompute the expected cashdisbursements for materialsdisbursements for materials

for the quarter.for the quarter.

Compute the expected cashCompute the expected cashdisbursements for materialsdisbursements for materials

for the quarter.for the quarter.


9-45

Quick Check

What are the total cash disbursements for the What are the total cash disbursements for the quarter? quarter?

a. $185,000a. $185,000

b. $ 68,000b. $ 68,000

c. $ 56,000c. $ 56,000

d. $201,400d. $201,400


a. $185,000a. $185,000

b. $ 68,000b. $ 68,000

c. $ 56,000c. $ 56,000

d. $201,400d. $201,400


9-46


a. $185,000a. $185,000

b. $ 68,000b. $ 68,000

c. $ 56,000c. $ 56,000

d. $201,400d. $201,400


a. $185,000a. $185,000

b. $ 68,000b. $ 68,000

c. $ 56,000c. $ 56,000

d. $201,400d. $201,400

Quick Check


9-47



9-48


Prepare a direct Prepare a direct labor budget.labor budget.


9-49 The Direct Labor Budget直接人工预算

• At Royal, each unit of product requires 0.05 hours (3 minutes) of direct labor.

• The Company has a “no layoff” policy so all employees will be paid for 40 hours of work each week.

• In exchange for the “no layoff” policy, workers agree to a wage rate of $10 per hour regardless of the hours worked (no overtime pay).

• For the next three months, the direct labor workforce will be paid for a minimum of 1,500 hours per month.

Let’s prepare the direct labor budget.Let’s prepare the direct labor budget.

• At Royal, each unit of product requires 0.05 hours (3 minutes) of direct labor.

• The Company has a “no layoff” policy so all employees will be paid for 40 hours of work each week.

• In exchange for the “no layoff” policy, workers agree to a wage rate of $10 per hour regardless of the hours worked (no overtime pay).

• For the next three months, the direct labor workforce will be paid for a minimum of 1,500 hours per month.

Let’s prepare the direct labor budget.Let’s prepare the direct labor budget.


9-50

The Direct Labor Budget

From production budget.From production budget.From production budget.From production budget.


9-51



9-52


Greater of labor hours requiredGreater of labor hours requiredor labor hours guaranteed.or labor hours guaranteed.

Greater of labor hours requiredGreater of labor hours requiredor labor hours guaranteed.or labor hours guaranteed.


9-53



9-54

Quick Check

What would be the total direct labor cost for the What would be the total direct labor cost for the quarter if the company follows its no lay-off policy, quarter if the company follows its no lay-off policy, but pays $15 (time-and-a-half) for every hour but pays $15 (time-and-a-half) for every hour worked in excess of 1,500 hours in a month? worked in excess of 1,500 hours in a month?

a. $79,500a. $79,500

b. $64,500b. $64,500

c. $61,000c. $61,000

d. $57,000d. $57,000


a. $79,500a. $79,500

b. $64,500b. $64,500

c. $61,000c. $61,000

d. $57,000d. $57,000


9-55


a. $79,500a. $79,500

b. $64,500b. $64,500

c. $61,000c. $61,000

d. $57,000d. $57,000


a. $79,500a. $79,500

b. $64,500b. $64,500

c. $61,000c. $61,000

d. $57,000d. $57,000

Quick Check

April May June QuarterLabor hours required 1,300 2,300 1,450 Regular hours paid 1,500 1,500 1,500 4,500

Overtime hours paid - 800 - 800

Total regular hours 4,500 $10 45,000$ Total overtime hours 800 $15 12,000$

Total pay 57,000$


9-56


Prepare a Prepare a manufacturing manufacturing

overhead budget.overhead budget.


9-57 Manufacturing Overhead Budget制造费用预算

• At Royal, manufacturing overhead is applied to units At Royal, manufacturing overhead is applied to units of product on the basis of direct labor hours.of product on the basis of direct labor hours.

• The variable manufacturing overhead rate is $20 per The variable manufacturing overhead rate is $20 per direct labor hour.direct labor hour.

• Fixed manufacturing overhead is $50,000 per month Fixed manufacturing overhead is $50,000 per month and includes $20,000 of noncash costs (primarily and includes $20,000 of noncash costs (primarily depreciation of plant assets).depreciation of plant assets).

Let’s prepare the manufacturing overhead budget.Let’s prepare the manufacturing overhead budget.

• At Royal, manufacturing overhead is applied to units At Royal, manufacturing overhead is applied to units of product on the basis of direct labor hours.of product on the basis of direct labor hours.

• The variable manufacturing overhead rate is $20 per The variable manufacturing overhead rate is $20 per direct labor hour.direct labor hour.

• Fixed manufacturing overhead is $50,000 per month Fixed manufacturing overhead is $50,000 per month and includes $20,000 of noncash costs (primarily and includes $20,000 of noncash costs (primarily depreciation of plant assets).depreciation of plant assets).

Let’s prepare the manufacturing overhead budget.Let’s prepare the manufacturing overhead budget.


9-58

Manufacturing Overhead Budget

Direct Labor Budget.Direct Labor Budget.Direct Labor Budget.Direct Labor Budget.


9-59


Total mfg. OH for quarter $251,000Total labor hours required 5,050

= $49.70 per hour *

* * roundedrounded


9-60


Depreciation is a noncash charge.Depreciation is a noncash charge.折旧是非现金的费用折旧是非现金的费用

Depreciation is a noncash charge.Depreciation is a noncash charge.折旧是非现金的费用折旧是非现金的费用


9-61

Production costs per unit Quantity Cost Total Direct materials 5.00 lbs. 0.40$ 2.00$ Direct labor Manufacturing overhead

Budgeted finished goods inventory Ending inventory in units Unit product cost Ending finished goods inventory

Ending Finished Goods Inventory Budget期末产成品存货的预算

Direct materialsDirect materialsbudget and information.budget and information.

Direct materialsDirect materialsbudget and information.budget and information.


9-62

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

Budgeted finished goods inventory Ending inventory in units Unit product cost Ending finished goods inventory

Ending Finished Goods Inventory Budget

Direct labor budget.Direct labor budget.Direct labor budget.Direct labor budget.


9-63

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

4.99$

Budgeted finished goods inventory Ending inventory in units Unit product cost 4.99$ Ending finished goods inventory ?


Total mfg. OH for quarter $251,000Total labor hours required 5,050

= $49.70 per hour *


9-64

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

4.99$

Budgeted finished goods inventory Ending inventory in units 5,000 Unit product cost 4.99$ Ending finished goods inventory 24,950$


Production Budget.Production Budget.Production Budget.Production Budget.


9-65


Prepare a selling and Prepare a selling and administrative administrative

expense budget.expense budget.


9-66Selling and Administrative Expense Budget销售和行政费用预算

• At Royal, the selling and administrative expenses budget is At Royal, the selling and administrative expenses budget is divided into variable and fixed components.divided into variable and fixed components.

• The variable selling and administrative expenses are $0.50 The variable selling and administrative expenses are $0.50 per unit sold.per unit sold.

• Fixed selling and administrative expenses are $70,000 per Fixed selling and administrative expenses are $70,000 per month.month.

• The fixed selling and administrative expenses include The fixed selling and administrative expenses include $10,000 in costs – primarily depreciation – that are not cash $10,000 in costs – primarily depreciation – that are not cash outflows of the current month.outflows of the current month.

Let’s prepare the company’s selling and administrative Let’s prepare the company’s selling and administrative expense budget.expense budget.

• At Royal, the selling and administrative expenses budget is At Royal, the selling and administrative expenses budget is divided into variable and fixed components.divided into variable and fixed components.

• The variable selling and administrative expenses are $0.50 The variable selling and administrative expenses are $0.50 per unit sold.per unit sold.

• Fixed selling and administrative expenses are $70,000 per Fixed selling and administrative expenses are $70,000 per month.month.

• The fixed selling and administrative expenses include The fixed selling and administrative expenses include $10,000 in costs – primarily depreciation – that are not cash $10,000 in costs – primarily depreciation – that are not cash outflows of the current month.outflows of the current month.

Let’s prepare the company’s selling and administrative Let’s prepare the company’s selling and administrative expense budget.expense budget.


9-67

Selling and Administrative Expense Budget

Calculate the selling and administrativeCalculate the selling and administrativecash expenses for the quarter.cash expenses for the quarter.

Calculate the selling and administrativeCalculate the selling and administrativecash expenses for the quarter.cash expenses for the quarter.


9-68

Quick Check

What are the total cash disbursements for selling What are the total cash disbursements for selling and administrative expenses for the quarter? and administrative expenses for the quarter?

a. $180,000a. $180,000

b. $230,000b. $230,000

c. $110,000c. $110,000

d. $ 70,000d. $ 70,000


a. $180,000a. $180,000

b. $230,000b. $230,000

c. $110,000c. $110,000

d. $ 70,000d. $ 70,000


9-69


a. $180,000a. $180,000

b. $230,000b. $230,000

c. $110,000c. $110,000

d. $ 70,000d. $ 70,000


a. $180,000a. $180,000

b. $230,000b. $230,000

c. $110,000c. $110,000

d. $ 70,000d. $ 70,000

Quick Check


9-70

Selling and Administrative Expense Budget


9-71


Prepare a cash Prepare a cash budget.budget.


9-72 Format of the Cash Budget现金预算的格式

The cash budget is divided into four sections:The cash budget is divided into four sections:

11 Cash receipts listing all cash inflows excluding borrowing;Cash receipts listing all cash inflows excluding borrowing; 现金收入现金收入列出所有除借款以外的现金流入列出所有除借款以外的现金流入

22 CashCash disbursements listing all payments excluding repayments of disbursements listing all payments excluding repayments of principal and interest;principal and interest;

现金支出列出所有的除偿付借款和利息的付款现金支出列出所有的除偿付借款和利息的付款

33 Cash excess or deficiency; andCash excess or deficiency; and

现金超出或缺损额现金超出或缺损额

44 The financing section listing all borrowings, repayments and interest.The financing section listing all borrowings, repayments and interest.

融资部分包括所有的借款，偿付和利息融资部分包括所有的借款，偿付和利息

The cash budget is divided into four sections:The cash budget is divided into four sections:

11 Cash receipts listing all cash inflows excluding borrowing;Cash receipts listing all cash inflows excluding borrowing; 现金收入现金收入列出所有除借款以外的现金流入列出所有除借款以外的现金流入

22 CashCash disbursements listing all payments excluding repayments of disbursements listing all payments excluding repayments of principal and interest;principal and interest;

现金支出列出所有的除偿付借款和利息的付款现金支出列出所有的除偿付借款和利息的付款

33 Cash excess or deficiency; andCash excess or deficiency; and

现金超出或缺损额现金超出或缺损额

44 The financing section listing all borrowings, repayments and interest.The financing section listing all borrowings, repayments and interest.

融资部分包括所有的借款，偿付和利息融资部分包括所有的借款，偿付和利息


9-73 The Cash Budget现金预算

Royal:Royal: Maintains a 16% open line of credit for $75,000Maintains a 16% open line of credit for $75,000 Maintains a minimum cash balance of $30,000Maintains a minimum cash balance of $30,000 Borrows on the first day of the month and repays Borrows on the first day of the month and repays

loans on the last day of the monthloans on the last day of the month Pays a cash dividend of $49,000 in AprilPays a cash dividend of $49,000 in April Purchases $143,700 of equipment in May and Purchases $143,700 of equipment in May and

$48,300 in June (both purchases paid in cash)$48,300 in June (both purchases paid in cash) Has an April 1 cash balance of $40,000Has an April 1 cash balance of $40,000

Royal:Royal: Maintains a 16% open line of credit for $75,000Maintains a 16% open line of credit for $75,000 Maintains a minimum cash balance of $30,000Maintains a minimum cash balance of $30,000 Borrows on the first day of the month and repays Borrows on the first day of the month and repays

loans on the last day of the monthloans on the last day of the month Pays a cash dividend of $49,000 in AprilPays a cash dividend of $49,000 in April Purchases $143,700 of equipment in May and Purchases $143,700 of equipment in May and

$48,300 in June (both purchases paid in cash)$48,300 in June (both purchases paid in cash) Has an April 1 cash balance of $40,000Has an April 1 cash balance of $40,000


9-74

The Cash Budget

Schedule of ExpectedSchedule of ExpectedCash Collections.Cash Collections.

Schedule of ExpectedSchedule of ExpectedCash Collections.Cash Collections.


9-75

The Cash Budget

Direct LaborDirect LaborBudget.Budget.

Direct LaborDirect LaborBudget.Budget.

ManufacturingManufacturingOverhead Budget.Overhead Budget.

ManufacturingManufacturingOverhead Budget.Overhead Budget.

Selling and AdministrativeSelling and AdministrativeExpense Budget.Expense Budget.

Selling and AdministrativeSelling and AdministrativeExpense Budget.Expense Budget.

Schedule of ExpectedSchedule of ExpectedCash Disbursements.Cash Disbursements.Schedule of ExpectedSchedule of ExpectedCash Disbursements.Cash Disbursements.


9-76

The Cash Budget

Because Royal maintainsBecause Royal maintainsa cash balance of $30,000,a cash balance of $30,000,the company must borrow the company must borrow

$50,000 on its line-of-credit.$50,000 on its line-of-credit.

Because Royal maintainsBecause Royal maintainsa cash balance of $30,000,a cash balance of $30,000,the company must borrow the company must borrow

$50,000 on its line-of-credit.$50,000 on its line-of-credit.


9-77

The Cash Budget

Ending cash balance for AprilEnding cash balance for Aprilis the beginning May balance.is the beginning May balance.Ending cash balance for AprilEnding cash balance for Aprilis the beginning May balance.is the beginning May balance.


9-78

The Cash Budget


9-79

Quick Check

What is the excess (deficiency) of cash available What is the excess (deficiency) of cash available over disbursements for June? over disbursements for June?

a. $ 85,000a. $ 85,000

b. $(10,000)b. $(10,000)

c. $ 75,000c. $ 75,000

d. $ 95,000d. $ 95,000


a. $ 85,000a. $ 85,000

b. $(10,000)b. $(10,000)

c. $ 75,000c. $ 75,000

d. $ 95,000d. $ 95,000


9-80


a. $ 85,000a. $ 85,000

b. $(10,000)b. $(10,000)

c. $ 75,000c. $ 75,000

d. $ 95,000d. $ 95,000


a. $ 85,000a. $ 85,000

b. $(10,000)b. $(10,000)

c. $ 75,000c. $ 75,000

d. $ 95,000d. $ 95,000

Quick Check


9-81

The Cash Budget

$50,000 × 16% × 3/12 = $2,000$50,000 × 16% × 3/12 = $2,000Borrowings on April 1 andBorrowings on April 1 and

repayment on June 30.repayment on June 30.

$50,000 × 16% × 3/12 = $2,000$50,000 × 16% × 3/12 = $2,000Borrowings on April 1 andBorrowings on April 1 and

repayment on June 30.repayment on June 30.


9-82 The Budgeted Income Statement预算损益表

Cash Budget

BudgetedIncome

Statement

Complete

d

After we complete the cash budget, After we complete the cash budget, we can prepare the budgeted income we can prepare the budgeted income

statement for Royal.statement for Royal.完成现金预算后，编制预算损益表。完成现金预算后，编制预算损益表。


9-83


Prepare a budgeted Prepare a budgeted income statement.income statement.


9-84

The Budgeted Income Statement

Royal CompanyBudgeted Income Statement

For the Three Months Ended June 30

Sales (100,000 units @ $10) 1,000,000$ Cost of goods sold (100,000 @ $4.99) 499,000 Gross margin 501,000 Selling and administrative expenses 260,000 Operating income 241,000 Interest expense 2,000 Net income 239,000$

Sales Budget.Sales Budget.Sales Budget.Sales Budget.

Ending FinishedEnding FinishedGoods Inventory.Goods Inventory.Ending FinishedEnding FinishedGoods Inventory.Goods Inventory.

Selling and Selling and AdministrativeAdministrative

Expense Budget.Expense Budget.

Selling and Selling and AdministrativeAdministrative

Expense Budget.Expense Budget.

Cash Budget.Cash Budget.Cash Budget.Cash Budget.


9-85


Prepare a Prepare a budgeted balance budgeted balance

sheet.sheet.


9-86 The Budgeted Balance Sheet预算资产负债表

Royal reported the following account Royal reported the following account balances prior to preparing its budgeted balances prior to preparing its budgeted

financial statements:financial statements:

• Land - $50,000Land - $50,000• Common stock - $200,000Common stock - $200,000• Retained earnings - $146,150Retained earnings - $146,150• Equipment - $175,000Equipment - $175,000

Royal reported the following account Royal reported the following account balances prior to preparing its budgeted balances prior to preparing its budgeted

financial statements:financial statements:

• Land - $50,000Land - $50,000• Common stock - $200,000Common stock - $200,000• Retained earnings - $146,150Retained earnings - $146,150• Equipment - $175,000Equipment - $175,000


9-87

Royal CompanyBudgeted Balance Sheet

June 30

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 Equipment 367,000 Total property and equipment 417,000 Total assets 564,550$

Accounts payable 28,400$ Common stock 200,000 Retained earnings 336,150 Total liabilities and equities 564,550$

11,500 lbs.11,500 lbs.at $0.40/lb.at $0.40/lb.11,500 lbs.11,500 lbs.at $0.40/lb.at $0.40/lb.

5,000 units5,000 unitsat $4.99 each.at $4.99 each.

5,000 units5,000 unitsat $4.99 each.at $4.99 each.

50% of June50% of Junepurchases purchases of $56,800.of $56,800.

50% of June50% of Junepurchases purchases of $56,800.of $56,800.

25% of June25% of Junesales of sales of

$300,000.$300,000.

25% of June25% of Junesales of sales of

$300,000.$300,000.


9-88

Royal CompanyBudgeted Balance Sheet

June 30

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 Equipment 367,000 Total property and equipment 417,000 Total assets 564,550$

Accounts payable 28,400$ Common stock 200,000 Retained earnings 336,150 Total liabilities and equities 564,550$

Beginning balance 146,150$ Add: net income 239,000 Deduct: dividends (49,000) Ending balance 336,150$


9-89

End of Chapter

Documents

Copyright © The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin Noreen - Chapter 9 Profit Planning 利润预算