BUDGETING
Jakarta, 13 April 2012
Agung K Sampurno
[email protected] 021-653555 ext 3731
Daftar Pembahasan
Pengertian Budgeting Fungsi dan Jenis jenis Budgeting Kaitan Budgeting dengan Company’s Strategic Objectives Environmental analysis Formulating company objective and strategy Operating budget: Analysis into Quarters and Months
Faktor yang mempengaruhi Budgeting Operational Budgeting Capital Budgeting Budget cycles and Outlook Proses Budgeting di Astra Int’l Penyusunan Budgeting Monitoring performance
What is Budgeting ?
Suatu perencanaan proyeksi posisi keuangan (forecast) yang disusun untuk kegiatan perusahaan di masa depan Dinyatakan dalam satuan rupiah atau satuan lain (kuantitas, %) Digunakan sebagai alat pengendalian kegiatan perusahaan oleh management
OVERVIEW: Sebuah Contoh:
OVERVIEW Contoh: Sebuah Rencana
Perusahaan akan menjual sebanyak 10.000 mobil di th 2012, 2013 ..... dst Meraih pangsa pasar 50%
Membutuhkan biaya promosi ....... milyar Mebutuhkan tenaga marketing dan administrasi ...... Orang Rencana biaya produksi sebesar ....... Perlu membangun jaringan / cabang / investasi aktiva tetap .... Dst .... HARUS DIBUAT BUDGET / ANGGARAN !
Strategi bisnis • Perumusan strategi • Perencanaan strategi
Trend watching Menerjemahkan dalam action plan
• Penyusunan program dan aktivitas kerja • Penyusunan anggaran • Implementasi • Pemantauan
Faktor mempengaruhi penyusunan budget Rumusan cara untuk memastikan tercapainya sasaran Kondisi dapat yang membatasi untuk mencapai sasaran Pertumbuhan ekonomi Inflasi Kurs valuta asing Suku bunga
Anggaran yang perlu dibuat:
Anggaran Penjualan Anggaran Produksi Anggaran Bahan Baku Anggaran Tenaga Kerja Anggaran Biaya Overhead Penyusunan Harga Pokok Produksi Anggaran Biaya Administrasi Umum Anggaran Piutang Anggaran Kas
Perencanaan Anggaran
Perencanaan Anggaran (Budgeting) adalah: suatu penentuan terlebih dahulu tentang: aktivitas atau kegiatan perusahaan (divisional atau departemental) yang akan dilakukan di waktu yang akan datang
Why :
Perubahan bersifat ketidakpastian (uncertainty) Kompetisi bisnis Pedoman kerja Pengawasan terhadap realisasi
Jenis Jenis Budgeting
Operational Budgeting: Pembuatan proyeksi posisi keuangan perusahaan di masa yang akan datang, yang berupa Income statement dan Balance Sheet (proyeksi revenue, biaya, kas, piutang, persediaan, hutang dan lain lain)
Capital Expenditure Budgeting Pembuatan proyeksi keuangan untuk keputusan investasi pada suatu aktiva tetap jangka panjang, misal: pembelian Tanah, Bangunan, mesin-mesin produksi. Feasibility Study (FS) termasuk dalam pengertian jenis ini. Ukuran yang digunakan: Payback Period, Net Present Value, Internal Rate of Return.
Budgeting: The Basis for Planning and Control A budget is a comprehensive financial plan for achieving the financial and operational goals of an organization.
Planning
Developing objectives for acquisition and use of resources.
Control
Steps taken by management to ensure that objectives are attained.
Pihak yang terlibat dalam Proses Budget Top Management
Middle Management
Supervisor
Supervisor
Middle Management
Supervisor
Flow of Budget Data
Supervisor
The Budget Period The annual operating budget may be divided into quarterly or monthly budgets.
2001
2002
2003
2004
Capital Budgets
A continuous budget is usually a twelve-month budget that adds one month as the current month is completed.
Contoh: Macro assumptions
Contoh: Target Market Pasar Mobil Indonesia (jumlah unit)
Des 2009
Des 2010
Des 2011
As of Maret 2012
MB Des 2012
MB Des 2013
Toyota
100.000
125.000
130.000
30.000
120.000
140.000
Daihatsu
50.000
45.000
66.000
12.000
71.000
80.000
Isuzu
50.000
40.000
70.000
15.000
77.000
85.000
BMW
1.000
1.100
1.300
125
1.000
1.300
45%
48%
55%
52%
57%
57%
% Market Share Astra
Operational Budgeting
Operational Budgeting Definition
A detailed projection of all estimated : income and expenses based on forecasted sales revenue during a given period (usually one year). It generally consists of several sub-budgets, the most important one being the sales budget, which is prepared first. Since an operating budget is a short-term budget, capital outlays are excluded because they are long-term costs.
Operational Budgeting Cakupan adalah sbb:
Anggaran Penjualan (Sales) Anggaran Produksi (Production) Anggaran Bahan Baku (Raw Material) Anggaran Tenaga Kerja (Manpower) Anggaran Biaya Overhead Penyusunan Harga Pokok Produksi Anggaran Biaya Administrasi Umum Anggaran Piutang Anggaran Kas
The Master Budget Sales forecast
Production schedule
Cost of goods sold and ending inventory budgets
Budgeted financial budgets: cash income balance sheet
Capital expenditures budget
Operating expense budgets
Preparing the Master Budget: An Illustration That’s enough talking about budgets, now show me an example!
Preparing the Master Budget: An Illustration Sales Budget Estimated Unit Sales
Estimated Unit Price
Analysis of economic and market conditions
+
Forecasts of customer needs from marketing personnel, etc
Factors to Consider When Forecasting Sales
Sales Forecasting A sales forecast is a prediction of sales under a given set of conditions.
Sales forecasts are usually prepared under the direction of the top sales executive.
The sales budget is the result of decisions to create Conditions that will generate a desired level of sales.
Cash Collections It is easiest to prepare budgeted cash collections at the same time as the sales budget.
Cash collections include the current month’s cash sales plus the previous month’s credit sales.
Purchases Budget and Cash Disbursements Budgeted purchases = Desired ending inventory + Cost of goods sold – Beginning inventory
Disbursements could include 50% of the current month’s purchases and 50% of the Previous month’s purchases.
Operating Expense Budget The budgeting of operating expenses depends on several factors.
Month-to-month changes in sales volume and other cost-driver activities directly influence many operating expenses.
Expenses driven by sales volume include sales commissions and many delivery expenses.
Operating Expense Budget Other expenses are not influenced by sales or other cost-driver activity and are regarded as fixed, within appropriate relevant ranges.
Rent
Insurance
Depreciation
Salaries
Operating Expense Disbursements Disbursements for operating expenses are based on the operating expense budget.
Disbursements may include 50% of last month’s and this month’s wages and commissions plus miscellaneous and rent expenses.
The total of these disbursements is then used in preparing the cash budget.
Budgeted Income Statement The income statement will be complete after addition of the interest expense, which is computed after the cash budget has been prepared.
Budgeted income from operations is often a benchmark for judging management performance.
Siapa yang menyetujui Budget • Direktur Utama (President Director) • Direktur Keuangan (Finance Director) Bagaimana apabila terjadi penyimpangan dalam realisasi anggaran?
UN_BUDGET & OVER_BUDGET APPROVAL
Budgeting Cycle: Activity
Source: internet
Budgeting Cycle: Reporting OL1
Monthly Report & Review OL3 vs Actual MB vs Actual
April
Monthly Report & Review OL1 vs Actual
OL3, Rev. MB N+1
MB N+1, OL2, Proj N+2, N+3 &/ N+4
START: Agustus 201x
Nov Monthly Report & Review OL2 vs Actual
OL = Outlook MB = Master Budget
Budget process flow
Formulir budget Description Grand Total 700 Employee Compensation 701 Employee Welfare 702 Uniform 703 Training & Education 704 Jamsostek & Pension 705 Recruitment 706 Donations 707 Scholarship For 3Rd Parties 708 Representation & Entertainment 709 Transportation & Travelling 710 Research & Development 711 Advertising & Promotion 712 Repair & Maintenance 713 Fuel & Lubricant 714 Tools & Other Equipment 720 Utility & Energy 721 Communications 722 Office Expenses 724 Professional Fees 725 Trade And Prof. Associate 728 Tax & Licenses 729 Bank Charges 730 Rent Expense 731 Insurance Expense 732 Security Expense 740 Marketing & Publicity 799 Miscellaneous Expense A. Internal Charging B. Depreciation & Amortization
Act. Jan-Jul
2010 Ags-Dec
OL2
2011 MB
2012 Projection
2013 Projection
Master Budget dan Outlook
Review before cut off (monthly)
Review after cut off (monthly)
Budget unrealized -> carry over / drop Actual realized > budget -> carry over (-) Adjustment based on actual Additional activities
Activities for N+1 (monthly) Projection for N+2, N+3, and or N+4 (annually)
Formulir budget
Akun Opex
Actual
Outlook Plan Agt-Des 2010
Plan 2011
Plan 2012
Plan 2013
Laporan budget: Neraca (1) 31-Jul-10
kurs A SSETS : CURRENT ASSETS : - Cash on hand & in Bank - Account Receivable A/R Related A/R third parties & Others - Prepaid Tax - Prepaid Expenses - Advance Payments - Forex contract receiv. Total Current Assets DUE FROM AFFCO & RELATED PARTIES INVESTMENT IN SHARES PROPERTY, PLANT & EQ. DEFFERED TAX ASSETS OTHER ASSETS : - Deffered charges - Goodwill - Construction in Progress - Advances for purchase of stocks - Others Total Other Assets TOTAL ASSETS
31-Agust-10
OL2 2010 30-Sep-10 31-Okt-10
30-Nop-10
31-Des-10
MB 2011
Projection 2012
Projection 2013
Laporan budget: Neraca (2) 31-Jul-10 LIABILITIES & SHAREHOLDERS' EQUITY LIABILITIES CURRENT LIABILITIES - Short Term Loan - Customer Deposit - Account Payable Subs. & ass. coys Others - Dividen Payable - Accrued Expenses - Taxes Payable - Forex contract payable - Current maturities of LTD Total Current Liabilities INTERCOMPANY ACCOUNTS DEFFERED TAX LIABILITIES DEFFERED INCOME SHARESHOLDERS' EQUITY - Capital Stock - Capital paid in Excess of Par Value - Company - Paid in capital - security issuance cost - Paid in capital - Stock option - Paid in capital - Warrants - Paid in capital - Others - Total Permanent Interbranch & Interunit - Excess of cost over equity in net asset of investee - Retained Earnings (Deficit) TOTAL SHARESHOLDERS' EQUITY
TOTAL LIAB & SH' EQUITY
31-Agust-10
OL2 2010 30-Sep-10 31-Okt-10
30-Nop-10
31-Des-10
MB 2011
Projection 2012
Projection 2013
Laporan budget: Laba Rugi YTD Jul-10 Agust-10
kurs OPERATING EXPENSES OTHER INCOME (CHARGES) Equity income Interest income Gain (loss) on sale of fixed assets Interest expenses Gain (loss) on forex Commitment fees Amortization of goodwill Rental Income Other Income (Charges) Total Other Income (Charges) - net PROFIT (LOSS) BEFORE TAXES PROVISION FOR INCOME TAX DEFFERED INCOME TAX NET INCOME BEGINNING R/E (DEFICIT) DIVIDEN AND TAX RECEIVED FROM SO DIVIDEN DECLARED ENDING R/E (DEFICIT)
Sep-10
Okt-10
Nop-10
Des-10
OL2 2010
MB 2011
Projection 2012
Projection 2013
Capital Expenditure Budgeting Analysis
Strategi bisnis • Perumusan strategi • Perencanaan strategi
Trend watching Menerjemahkan dalam action plan
• Penyusunan program dan aktivitas kerja • Penyusunan anggaran • Implementasi • Pemantauan
Faktor mempengaruhi penyusunan budget Rumusan cara untuk memastikan tercapainya sasaran Kondisi dapat yang membatasi untuk mencapai sasaran Pertumbuhan ekonomi Inflasi Kurs valuta asing Suku bunga
Penganggaran Modal (Capital Expenditure Budgeting) Modal (Capital) menunjukkan aktiva tetap yang digunakan untuk produksi
Anggaran (budget) adalah sebuah rencana rinci yg memproyeksikan aliran kas masuk dan aliran kas keluar selama beberapa periode pada saat yg akan datang.
Capital budget adalah garis besar rencana pengeluaran aktiva tetap
Penganggaran modal (capital budgeting) adalah proses menyeluruh menganalisa proyek2 dan menentuan mana saja yang dimasukkan ke dalam anggaran modal.
Why Capital Budgeting is so Important? Involve massive investment of resources Are not easily reversible Have long-term implications for the firm Involve uncertainty and risk for the firm
Pentingnya Penggangaran Modal 1.
2. 3.
Keputusan penggaran modal akan berpengaruh pada jangka waktu yang lama sehingga perusahaan kehilangan fleksibilitasnya. Penanggaran modal yg efektif akan menaikkan ketepatan waktu dan kualitas dari penambahan aktiva. Pengeluaran modal sangatlah penting
Klasifikasi Proyek Replacement: perawatan bisnis mengganti peralatan yg rusak 2. Replacement: pengurangan biaya mengganti peralatan yg sudah ketinggalan jaman sehingga mengurangi biaya 3. Ekspansi produk atau pasar yg sudah ada pengeluaran2 untuk meningkatkan output produk yg sudah ada atau menambah toko. 4. Ekspansi ke produk atau pasar yang baru 1.
5. Proyek keamanan atau lingkungan 6. Penelitian dan pengembangan 7. Kontrak2 jangka panjang: kontrak untuk menyediakan produk atau jasa pada kustomer tertentu 8. Lain-lain: bangunan kantor, tempat parkir, pesawat terbang perusahaan.
SLIDE FEASIBILITY STUDY
END
Tambahan bahan
TAHAP-TAHAP PENGANGGARAN MODAL 1. 2. 3. 4. 5. 6.
Biaya proyek harus ditentukan Manajemen harus memperkirakan aliran kas yg diharapkan dari proyek, termasuk nilai akhir aktiva Risiko dari aliran kas proyek harus diestimasi. (memakai distribusi probabilitas aliran kas) Dengan mengetahui risiko dari proyek, manajemen harus menentukan biaya modal (cost of capital) yg tepat untuk mendiskon aliran kas proyek Dengan menggunakan nilai waktu uang, aliran kas masuk yang diharapkan digunakan untuk memperkirakan nilai aktiva. Terakhir, nilai sekarang dari aliran kas yg diharapkan dibandingkan dengan biayanya,
Important Concepts 1. 2. 3. 4. 5.
A capital budgeting decision represents a long-term investment decision Cash flow rather than earning is used in capital budgeting decision The three methods of ranking investments are the payback method, the internal rate of return, and net present value The discount rate or cutoff rate is normally the cost of capital The tow primary cash inflows analyzed in a capital budgeting decision are the aftertax operating benefits and the tax shield benefits of depreciation
UKURAN UNTUK KEPUTUSAN PENGANGGARAN MODAL 1. 2. 3.
Payback period Net Present Value (NPV) Internal Rate of Return (IRR)
PAYBACK PERIOD (Periode Pengembalian) Periode waktu yang menunjukkan berapa lama dana yang diinvestasikan akan bisa kembali Contoh: Cash inflows of $10.000 investment Year
Project A
Project B
1
5.000
1.500
2
5.000
2.000
3
2.000
2.500
4
-
5.000
5
-
5.000
Rumus:
Payback = tahun sebelum balik modal +biaya yang belum balik pada awal tahun/aliran kas pada tahun tsb
Proyek A payback period = 2 tahun Proyek B payback period = 3.8 tahun Makin pendek payback period makin baik.
Payback Period Jika payback period suatu investasi kurang dari payback period yang disyaratkan, maka usulan investasi layak diterima semua. Masalah2 dgn payback period: 1. Mengabaikan aliran kas masuk setelah periode cutofff. Contoh: $2000 di tahun 3 untuk proyek A diabaikan. Juga $5000 di tahun 5 untuk proyek B. Walaupun $5.000 diganti dgn $50.000, itu tidak mempengaruhi decision pada metode payback period.
2. Metoda payback tidak mempertimbangkan nilai waktu uang. Investment of $10.000
Year
Early Returns
Late Returns
1
$9000
1000
2
1000
9000
3
1000
1000
Proyek pertama lebih bagus karena mendapatkan 9000 pada tahun pertama
2. Net Present Value (NPV) Adalah metode penilaian investasi yg menggunakan discounted cash flow. (mempertimbangkan nilai waktu uang pada aliran kas yg terjadi)
Net Present Value - Present value of cash flows minus initial investments.
Opportunity Cost of Capital - Expected rate of return given up by investing in a project
Net Present Value Example Suppose we can invest $50 today and receive $60 in one year. What is our increase in value given a 10% expected return?
60 Profit = -50 + = $4.55 1.10 This is the definition of NPV
$4.55 $50
Added Value
Initial Investment
Net Present Value Rumus: NPV = PV - required investment
Ct NPV = C0 + t (1 + r )
C1 C2 Ct NPV = C0 + + +...+ t 1 2 (1 + r ) (1 + r ) (1 + r )
Net Present Value Terminology C = Cash Flow t = time period of the investment r = “opportunity cost of capital”
The Cash Flow could be positive or negative at any time period.
Net Present Value Net Present Value Rule Managers increase shareholders’ wealth by accepting all projects that are worth more than they cost. Therefore, they should accept all projects with a positive net present value.
NPV Example Perusahaan anda mempunyai kesempatan untuk membeli gedung kantor. Anda akan mempunyai penyewa yang bersedia untuk membayar sebesar Rp16 jt per tahun selama 3 tahun. Pada akhir tahun ketiga anda memperkirakan akan bisa menjual gedung kantor itu senilai Rp 450 juta. Harga berapa yang anda mau bayar untuk gedung kantor itu? Rate of return yg diharapkan= 7%
Net Present Value $466,000
Example – continued (dalam ribuan) $16,000
Present Value 0 14,953 14,953
380,395
$409,323
1
$450,000
$16,000
2
$16,000
3
Apabila gedung kantor itu ditawarkan untuk dijual dengan harga Rp350 jt, apakah anda akan membelinya? Dan berapa nilai tambah (added value) yang dihasilkan oleh pembelian anda? (dalam ribuan)
16,000 16,000 466,000 NPV = −350,000 + + + 1 2 (1.07) (1.07) (1.07)3 NPV = 59,323
Internal Rate of Return
Adalah tingkat discount (discount rate) yang menyamakan nilai sekarang dari aliran kas yang akan terjadi (PV inflows) dengan nilai sekarang aliran kas keluar mula2 (PV investment cost) PV (inflows) = PV (investment costs) Atau Internal Rate of Return (IRR) - Discount rate at which NPV = 0. Mencari IRR dilakukan dengan prosedur coba2 (trial dan error)
Jadi, apabila present value terlalu rendah maka kita merendahkan IRR nya. Sebaliknya apabila PV terlalu tinggi, kita meninggikan IRRnya
Internal Rate of Return Example You can purchase a building for $350,000. The investment will generate $16,000 in cash flows (i.e. rent) during the first three years. At the end of three years you will sell the building for $450,000. What is the IRR on this investment?
Internal Rate of Return 16,000 16,000 466,000 0 = −350,000 + + + 1 2 (1 + IRR ) (1 + IRR ) (1 + IRR ) 3
IRR = 12.96%
IRR Kriteria penerimaan: Apabila suatu proyek mempunyai IRR lebih besar daripada biaya dana (cost of fund) maka proyek diterima.
Ini berarti proyek menguntungkan karena ada kelebihan dana bagi shareholder setelah dana yg dihasilkan proyek digunakan untuk membayar modal. IRR dibandingkan dengan cost of fund atau hurdle rate.
Perbandingan antara Metode NPV dan IRR Apabila ada satu proyek yang independen maka NPV dan IRR akan selalu memberikan rekomendasi yang sama untuk menerima atau menolak usulan proyek tersebut. Tapi apabila ada proyek2 yang mutually exclusive, NPV dan IRR tidak selalu memberikan rekomendasi yg sama.
Ini disebabkan oleh dua kondisi: 1. Ukuran proyek berbeda. Yg satu lebih besar daripada yg lain 2. Perbedaan waktu. Waktu dari aliran kas dari dua proyek berbeda. Satu proyek aliran kasnya terjadi pada tahun2 awal sementara yg proyek yg lain aliran kasnya terjadi pada tahun2 akhir Intinya: untuk proyek2 yg mutually exclusive, pilih proyek dengan NPV yang tertinggi.
Summary of Training
Summary Latihan Soal
Bahan Referensi Tambahan
Konsep - Konsep Capital Budgeting
Selling and Administrative (S&A) Expense Budget
Production Budget
Selling and Administrative Expense Budget
Selling and Administrative (S&A) Expense Budget
Selling expense budgets contain both variable and fixed items.
Variable items: shipping costs and sales commissions.
Fixed items: advertising and sales salaries.
Administrative expense budgets contain mostly fixed items.
Executive salaries and depreciation on company offices.
Cash Payments for (S&A) Expenses Variable selling and administrative expenses are $.50 per unit sold and fixed selling and administrative expenses are $70,000 per month. Fixed selling and administrative expenses include $10,000 in depreciation which does not require a cash outflow.
Cash Payments for (S&A) Expenses Budgeted unit sales Variable S&A per unit Variable S&A expense Fixed S&A expense Total S&A expense Deduct depreciation S&A expense - cash
April 20,000 $ 0.50 $ 10,000 70,000 $ 80,000
May 50,000 $ 0.50 $ 25,000 70,000 $ 95,000
June 30,000 $ 0.50 $ 15,000 70,000 $ 85,000
Cash Payments for (S&A) Expenses Budgeted unit sales Variable S&A per unit Variable S&A expense Fixed S&A expense Total S&A expense Deduct depreciation S&A expense - cash
April 20,000 $ 0.50 $ 10,000 70,000 $ 80,000 10,000 $ 70,000
May 50,000 $ 0.50 $ 25,000 70,000 $ 95,000 10,000 $ 85,000
June 30,000 $ 0.50 $ 15,000 70,000 $ 85,000 10,000 $ 75,000
Cash Receipts Budget I have seen a lot of cash payments but no cash receipts. Show me some cash receipts!
Cash Receipts Budget All sales are on account. Ellis’s collection pattern is: 70 percent collected in month of sale 25 percent collected in month after sale 5 percent will be uncollectible
Accounts receivable on March 31 is $30,000, all of which is collectible.
Cash Receipts Budget Budgeted unit sales Price per unit Budgeted sales revenue Receipts from March sales Receipts from April sales Receipts from May sales Receipts from June sales Total cash receipts
April 20,000 $ 10 $ 200,000 $ 30,000
May 50,000 $ 10 $ 500,000
June 30,000 $ 10 $ 300,000
Cash Receipts Budget Budgeted unit sales Price per unit Budgeted sales revenue Receipts from March sales Receipts from April sales Receipts from May sales Receipts from June sales Total cash receipts
April 20,000 $ 10 $ 200,000
May 50,000 $ 10 $ 500,000
$ 30,000 140,000
$ 50,000
June 30,000 $ 10 $ 300,000
$ 170,000
April: .70 × $200,000 = $140,000 and .25 × $200,000 = $50,000
Cash Receipts Budget Budgeted unit sales Price per unit Budgeted sales revenue Receipts from March sales Receipts from April sales Receipts from May sales Receipts from June sales Total cash receipts
April 20,000 $ 10 $ 200,000 $ 30,000 140,000
$ 170,000
May 50,000 $ 10 $ 500,000
June 30,000 $ 10 $ 300,000
$ 50,000 350,000
$ 125,000
$ 400,000
April: .70 × $200,000 = $140,000 and .25 × $200,000 = $50,000 May: .70 × $500,000 = $350,000 and .25 × $500,000 = $125,000
Cash Receipts Budget Budgeted unit sales Price per unit Budgeted sales revenue Receipts from March sales Receipts from April sales Receipts from May sales Receipts from June sales Total cash receipts
April 20,000 $ 10 $ 200,000 $ 30,000 140,000
$ 170,000
May 50,000 $ 10 $ 500,000 $ 50,000 350,000 $ 400,000
June 30,000 $ 10 $ 300,000
$ 125,000 210,000 $ 335,000
April: .70 × $200,000 = $140,000 and .25 × $200,000 = $50,000 May: .70 × $500,000 = $350,000 and .25 × $500,000 = $125,000 June: .70 × $300,000 = $210,000
Comprehensive Cash Budget With just a little more information we will be able to prepare a comprehensive cash budget.
Comprehensive Cash Budget Additional Information Ellis Magnet Company:
Has a $100,000 line of credit at its bank, with a zero balance on April 1. Maintains a $30,000 minimum cash balance. Borrows at the beginning of a month and repays at the end of a month. Pays interest at 16 percent when a principal payment is made. Pays a $51,000 cash dividend in April. Purchases equipment costing $143,700 in May and $48,800 in June. Has a $40,000 cash balance on April 1.
Comprehensive Cash Budget Beginning cash balance Cash receipts Cash available Cash payments: Materials budget Labor budget Manufacturing OH budget S&A expense budget Equipment purchases Dividends Total cash payments Balance before financing Borrowing Principal repayment Interest Ending cash balance
April $ 40,000
May
June
Comprehensive Cash Budget Beginning cash balance Cash receipts Cash available Cash payments: Materials budget Labor budget Manufacturing OH budget S&A expense budget Equipment purchases Dividends Total cash payments Balance before financing Borrowing Principal repayment Interest Ending cash balance
April $ 40,000 170,000 $ 210,000
May 400,000
June 335,000
Comprehensive Cash Budget Beginning cash balance Cash receipts Cash available
April $ 40,000 170,000 $ 210,000
Cash payments: Materials budget Labor budget Manufacturing OH budget S&A expense budget Equipment purchases Dividends Total cash payments
$ 40,000 13,000 56,000 70,000 0 51,000 $ 230,000
Balance before financing
$ (20,000)
Borrowing Principal repayment Interest Ending cash balance
May
June
400,000
335,000
$ 72,300 23,000 76,000 85,000 143,700 0 $ 400,000
$ 72,700 14,500 59,000 75,000 48,800 0 $ 270,000
Comprehensive Cash Budget Beginning cash balance Cash receipts Cash available
April $ 40,000 170,000 $ 210,000
May $ 30,000 400,000 $ 430,000
Cash payments: Materials budget Labor budget Manufacturing OH budget S&A expense budget Equipment purchases Dividends Total cash payments
$ 40,000 13,000 56,000 70,000 0 51,000 $ 230,000
$ 72,300 23,000 76,000 85,000 143,700 0 $ 400,000
Balance before financing
$ (20,000)
$ 30,000
Borrowing Principal repayment Interest Ending cash balance
50,000 0 0 $ 30,000
June 335,000
$ 72,700 14,500 59,000 75,000 48,800 0 $ 270,000
Comprehensive Cash Budget Beginning cash balance Cash receipts Cash available
April $ 40,000 170,000 $ 210,000
May $ 30,000 400,000 $ 430,000
June $ 30,000 335,000 $ 365,000
Cash payments: Materials budget Labor budget Manufacturing OH budget S&A expense budget Equipment purchases Dividends Total cash payments
$ 40,000 13,000 56,000 70,000 0 51,000 $ 230,000
$ 72,300 23,000 76,000 85,000 143,700 0 $ 400,000
$ 72,700 14,500 59,000 75,000 48,800 0 $ 270,000
Balance before financing
$ (20,000)
$ 30,000
$ 95,000
Borrowing Principal repayment Interest Ending cash balance
50,000 0 0 $ 30,000
0 0 0 $ 30,000
Comprehensive Cash Budget Beginning cash balance Cash receipts Cash available
April $ 40,000 170,000 $ 210,000
May $ 30,000 400,000 $ 430,000
June $ 30,000 335,000 $ 365,000
Cash payments: Materials budget Labor budget Manufacturing OH budget S&A expense budget Equipment purchases Dividends Total cash payments
$ 40,000 13,000 56,000 70,000 0 51,000 $ 230,000
$ 72,300 23,000 76,000 85,000 143,700 0 $ 400,000
$ 72,700 14,500 59,000 75,000 48,800 0 $ 270,000
Balance before financing
$ (20,000)
$ 30,000
$ 95,000
Borrowing Principal repayment Interest Ending cash balance
50,000 0 0 0 $50,000 × .16 × 3/12 0 = $2,000 0 $ 30,000 $ 30,000
0 (50,000) (2,000) $ 43,000
The Budgeted Income Statement
Cash Budget
Budgeted Income Statement
The Budgeted Income Statement Ellis Magnet Company Budgeted Income Statement For the Three Months Ended June 30 Sales (100,000 units @ $10)
$ 1,000,000
The Budgeted Income Statement Ellis Magnet Company Budgeted Income Statement For the Three Months Ended June 30 Sales (100,000 units @ $10) Cost of goods sold (100,000 @ $4.99) Gross margin
$ 1,000,000 499,000 $ 501,000
Computation of unit cost follows
The Budgeted Income Statement Production costs per unit Direct materials Direct labor Manufacturing overhead Total unit cost
Quantity Cost 5.00 lbs. $ 0.40 0.05 hrs. $ 10.00 0.05 hrs. $ 49.70
Total mfg. OH for quarter $251,000 Total labor hours required 5,050 hrs.
Total $ 2.00 0.50 2.49 $ 4.99
= $49.70 per hr.
From labor and Mfg. OH budgets April May June Total
Labor Hours 1,300 2,300 1,450 5,050
Mfg. OH $ 76,000 96,000 79,000 $ 251,000
Manufacturing overhead is applied based on direct labor hours.
The Budgeted Income Statement Ellis Magnet Company Budgeted 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 From S&A Expense Budget April $ 80,000 May 95,000 June 85,000 Total $ 260,000
The Budgeted Income Statement Ellis Magnet Company Budgeted Income Statement For the Three Months Ended June 30 Sales (100,000 units @ $10) Cost of goods sold (100,000 @ $4.99) Gross margin Selling and administrative expenses Operating income Interest expense Net income
$ 1,000,000 499,000 $ 501,000 260,000 $ 241,000 2,000 $ 239,000
The Budgeted Balance Sheet
Budgeted Income Statement
Budgeted Balance Sheet
The Budgeted Balance Sheet Ellis reports the following account balances on June 30, prior to preparing its budgeted financial statements:
Land - $50,000 Building (net) - $174,500 Common stock - $200,000 Equipment (net) - $192,500 Retained earnings - $148,150
Ellis Magnet Company Budgeted Balance Sheet June 30, 2002 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 Building 174,500 Equipment 192,500 Total property and equipment $ 417,000 Total assets $ 564,550 Liabilities and Equities Accounts payable Common stock Retained earnings Total liabilities and equities
$ 28,400 200,000 336,150 $ 564,550
25% of June sales of $300,000 11,500 lbs. @ $.40 per lb.
5,000 units @ $4.99 each
50% of June purchases of $56,800
Ellis Magnet Company Budgeted Balance Sheet June 30, 2002 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 Beginning balance $ 148,150 Land $ 50,000 Add: net income 239,000 Building 174,500 Deduct: dividends (51,000) Equipment 192,500 Ending balance $ 336,150 Total property and equipment $ 417,000 Total assets $ 564,550 Liabilities and Equities Accounts payable Common stock Retained earnings Total liabilities and equities
$ 28,400 200,000 336,150 $ 564,550
