Chapter # 9 (Master Budegeting - Managerial Accounting 17th Edition ).pptx

Title: Master Budgeting: A Comprehensive Guide to Strategic Financial Planning

Description:
Master budgeting is a cornerstone of effective financial management, providing organizations with a roadmap for achieving their long-term strategic goals. This PowerPoint presentation offers a detailed exploration of master budgeting, covering its fundamental principles, components, and strategic significance. From sales forecasts and operating budgets to cash flow projections and variance analysis, each aspect of the master budgeting process is dissected, providing insights into best practices and common pitfalls to avoid. Through clear explanations, real-world examples, and practical tips, this presentation equips audiences with the knowledge and tools needed to develop and execute robust master budgets that drive performance, optimize resource allocation, and enhance financial decision-making. Whether you're a finance professional, business leader, or student, this presentation will deepen your understanding of master budgeting and empower you to excel in strategic financial planning.

1. Managerial Accounting 17 th edition Master Budgeting By : Islam Uddin Palh BBA - Finance Instructor : Nadia Anjum

2. Budget A budget is a detailed plan for the future, usually expressed in formal quantitative terms. A company’s budget ordinarily covers one year corresponding to its fiscal year and it is often broken down into quarterly and monthly budgets. Usage: It has two distinct purposes i.e. Planning involves developing goals and preparing various budgets to achieve those goals. Control involves gathering feedback to ensure that the plan is being properly executed or modified as circumstances change. 2 2 Sukkur IBA University Kandhkot Campus

3. Why Do Organizations Create Budgets? 3 Sukkur IBA University Kandhkot Campus

4. The master budget consists of a number of separate but interdependent budgets that formally lay out the company’s sales, production, and financial goals. The master budget culminates in a cash budget, a budgeted income statement, and a budgeted balance sheet. It is a detailed plan showing how cash resources will be acquired and used. The budgeted income statement provides an estimate of net income for the budget period and it relies on information from the sales budget, ending finished goods inventory budget, selling and administrative expense budget, and the cash budget . It is a detailed schedule showing the expected sales for the budget period. An accurate sales budget is the key to the entire budgeting process . 4 Sukkur IBA University Kandhkot Campus Master Budget Cash Budget Sales Budget

5. 5 Sukkur IBA University Kandhkot Campus The Master Budget Interrelationships

6. Sales Budget Example 6 Sukkur IBA University Kandhkot Campus

7. Production Budget The production budget lists the number of units that must be produced to satisfy sales needs and to provide for the desired ending finished goods inventory. 7 Sukkur IBA University Kandhkot Campus

8. Production Budget Example 8 Sukkur IBA University Kandhkot Campus

9. Merchandise Purchases Budget It shows the amount of goods to be purchased from suppliers during the period. 9 Budgeted cost of goods sold Add: desired ending merchandising inventory Total units needed Less : beginning merchandising inventory No of Units to be purchased Format of Merchandise Purchases Budget Sukkur IBA University Kandhkot Campus

10. The Direct Materials Budget It details the raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories. 10 Sukkur IBA University Kandhkot Campus

11. 11 Direct Materials Budget Example Sukkur IBA University Kandhkot campus Sukkur IBA University Kandhkot Campus

12. The Direct Labor Budget It shows the direct labor hours required to satisfy the production budget. It helps to know in advance how much labor time will be needed throughout the budget year, the company can develop plans to adjust the labor force as the situation requires. 12 Sukkur IBA University Kandhkot Campus

13. 13 Direct Labor Budget Example Sukkur IBA University Kandhkot Campus

14. The Manufacturing Overhead Budget The manufacturing overhead budget lists all costs of production other than direct materials and direct labor. 14 Sukkur IBA University Kandhkot Campus

15. 15 Manufacturing Overhead Budget Example Sukkur IBA University Kandhkot Campus

16. Cash Budget The cash budget is composed of four main sections: The cash receipts section. The cash disbursements section. The cash excess or deficiency section. The financing section 16 Sukkur IBA University Kandhkot Campus

17. 17 Cash Budget Example Sukkur IBA University Kandhkot Campus

18. Budgeted Income Statement The budgeted income statement is one of the key schedules in the budget process. It shows the company’s planned profit and serves as a benchmark against which subsequent company performance can be measured. 18 Sukkur IBA University Kandhkot Campus

19. 19 Budgeted Income Statement Example Sukkur IBA University Kandhkot Campus

20. The Budgeted Balance Sheet It is a financial document that presents the estimated value of a startup's assets, liabilities, and equity in the foreseeable future. This predicted value is calculated by factoring in inflation and, possibly, increasing/decreasing capacity. 20 Sukkur IBA University Kandhkot Campus

21. 21 Budgeted Balance Sheet Example Sukkur IBA University Kandhkot Campus

22. Thank you Sukkur IBA University – Kandhkot Campus has been established to offer access to quality education to the people of underprivileged areas of Pakistan. With its geographical importance in Kandhkot city, the campus provides easy access to the students hailing from south Punjab, northern Sindh, and south-east Baluchistan. The campus offers admission in various programs including undergraduate, foundation semester, summer program, and short courses. Undergraduate programs offered in three important disciplines: Bachelor of Business Administration Bachelor of Computer Science Bachelor of Education About