BUDGETING
Jakarta, 13 April 2012
Agung K Sampurno
agung.sampurno@ai.astra.co.id
021-653555 ext 3731
Daftar Pembahasan
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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
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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 ?
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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
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
Perusahaan akan menjual sebanyak 10.000
mobil di th 2012, 2013 ..... dst
Meraih pangsa pasar 50%
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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:
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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 :
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Perubahan bersifat ketidakpastian (uncertainty)
Kompetisi bisnis
Pedoman kerja
Pengawasan terhadap realisasi
Jenis Jenis Budgeting
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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:
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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
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Review before cut off (monthly)
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Review after cut off (monthly)
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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
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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.
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Capital budget adalah garis besar rencana pengeluaran aktiva
tetap
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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
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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.
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2. Metoda payback tidak mempertimbangkan
nilai waktu uang.
Investment of $10.000
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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
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

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
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
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