Budgeted Income Statement and Balance Sheet
AGENDA: PROFIT PLANNING (BUDGETING) Building a master budget. Sales budget Production budget Direct materials budget Direct labor budget Manufacturing overhead budget Ending finished goods inventory budget Selling and administrative expenses budget Cash budget Budgeted income statement Budgeted balance sheet OVERVIEW OF BUDGETING A budget is a detailed plan for acquiring and using financial and other resources over a specified period. Budgeting involves two stages: Planning: Developing objectives and preparing various detailed budgets to achieve those objectives. Control: The steps taken by management to attain the objectives set down at the planning stage. PURPOSES OF BUDGETING Budgets communicate management’s plans throughout the organization. Budgeting forces managers to give planning top priority. Budgets provide a means of allocating resources to their most effective…
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