MASTER BUDGET

 Sales Budget = Units x Price per unit

 Collection Budget- 10% this month , 20% next month- RECEIPT!!!!

Sales: 40% cash sales 60% credit

100,000

(need the collection policy- the percentages)

Case 1: AR Workback Method
AR BEG
ADD: CREDIT SALES
LESS: COLLECTION
AR END

AR BEG
ADD: CREDIT SALES
LESS: AR END
COLLECTION

Case 2: Percentage of Monthly Sales (Example: 10% 1st Month, 70% 2nd, 20% 3 rd)
APRIL 100,000
MAY100,000
JUNE100,000

JUNE
10,000
70,000
20,000
100,000

Case 3: Total Cash Available – Cash Beginning (From Cash Budget)

Cash Beginning 20,000

Add: Collection 80,000
Total Cash Available 100,000
 Production Budget
(need the inventory policy)

Case 1: Units
Units to be sold
Add: Desired ending inventory-
Less: Beginning inventory
Units to be produced
10,000 = 100,000Php- Gross Profit Rate 20%, 80%
2,000 (Inventory Policy-20% next month)
1,000
11,000

Case 2: Amount
Cost of goods sold xx80,000
Add: Ending inventory xx24,000
Less: Beginning inventory (xx)14,000
Purchase/COGM xx90,000

To get the beginning inventory of the very first month:

#1: Balance Sheet:
#2: Kwento: Problem might state the amount
#3: Assumption: Use the ending inventory rate from the sale of that month (January) as well

 Raw Materials
Units to be sold xx
Add: Desired ending inventory xx
Less: Beginning inventory (xx)
Units to be purchased xx

 Disbursement- Purchase of Inventory

Case 1: AP Workback Method
Case 2: Percentage of Monthly Purchases
Case 3: Total Disbursement – Other Disbursements

 Direct Labor Budget = No. of units to be produced x DL Hour per unit x DL Rate
600,000 x 2 x 50
600,000 x .5 x 50
  Overhead Cost Budget

Case 1: No. of units to be produced x OH rate per unit

600,000 x 10

Case 2: 100,000 1 month

Variable overhead (20 pesos per unit)
Add: Fixed overhead 600,000 might be annually=
Total manufacturing overhead xx

 Marketing and Administrative Expense Budget

Note: Salaries is Fixed, Wages is Variable

Variable cost (units x rate) xx

Add: Fixed cost xx
Total cost xx

Note: Depreciation and non-monetary expenses are not included

 Cash Budget
Note: In loan, bank does not make pautang butal butal “to borrow in increments of 1,000”
 Budgeted Cost of Sales
 Budgeted Income Statement
 Budgeted Statement of Financial Position

ORGANIZATIONAL INNOVATIONS

 Prevention Cost, Appraisal Cost, Internal Failure Cost, External Failure Cost
20+30+50+20=100 200
Rate = Cost / Total Sales

 Quality Cost Index = Total Quality Cost / Direct Labor Cost x 100

BALANCED SCORECARD

 Growth Component- Revenue Effect

 Actual units sold this year xx
Less: Actual units sold last year (xx)
Multiply: Output price last year xx
Favorable (Unfavorable) xx

 Growth Component- Cost Effect

(Computed for each cost: DM, Conversion Cost, Selling and Customer Service)

Actual units of input this year

(proportion to input-output last year) xx
Less: Actual units of input last year (xx)
Multiply by: Input price last year xx
Unfavorable (Favorable) xx

 Price-Recovery Component- Revenue Effect

Output price this year xx

Less: Output price last year (xx)
Multiply: Actual units sold this year xx
Favorable (Unfavorable) xx
 Price-Recovery Component- Cost Effect
(Computed for each cost: DM, Conversion Cost, Selling and Customer Service)

Input price this year xx

Less: Input price last year (xx)
Multiply: Actual units of input this year
(proportion to input-output last year) xx
Unfavorable (Favorable) xx

 Productivity Component

Actual units of input this year’s output xx

Less: Actual units of input this year
(proportion to input-output last year) (xx)
Multiply by: Output price last year xx
Unfavorable (Favorable) xx

 MCE = Value-added time/Throughput time

 Delivery cycle time = Wait time + Throughput time
 Throughput time = Value-added time + non-value-added time

COST PLANNING
  Life Cycle Costing w/ ABC
 Target Cost = Competitive Price =Desired Profit
 Theory of Constraint
Additional relevant cost xx
Less: Increase in throughput contribution (xx)
Net benefit/cost xx

 Throughput contribution = Selling Price – Variable (Direct Material)

Segment Reporting

 Contribution Margin = Sales – Variable Cost

 CM Ratio = Contribution Margin/Sales
 Segment Margin= Contribution Margin – Traceable Fixed Expenses