Discuss the process of preparing a budget

Solutions

Expert Solution

PROCESS OF PREPARING BUDGET

Process of preparing Budget refers-:

The Financial service Department prepares worksheets to assist the department to head in preparation of budget estimates.
The Administrators calls a meeting of managers and they present and discuss plans for the following years
The managers work with financial services, or work alone to prepare estimate for the departments coming years
The completed budgets are presented by the managers to their executive officers for review and approval.
The jurisdiction of budget request may be required in writing.

Mainly 5 steps to prepare budget -:

Obtaining estimation

Obtaining estimation of sales, production level, expected cost and availing of recourses from each sub-unit/division/department.

Coordinating estimation

In my organization, the budget committee evaluates the different plans submitted by various organizational units to determine the potentiality.

Implementing the budget plans

The final budget is presented to the managers concerned and adopted as the plan of operation of the coming budget period.

Reporting interim progress towards budgeted objectives

As a feedback of budgeting process, performance reports are prepared to inform departmental managers and top management about the performance achieved in terms of budgeted figures.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Soprano Co. is in the process of preparing the second quarter budget for 2016, and the...

Soprano Co. is in the process of preparing the second quarter budget for 2016, and the following data have been assembled: The company sells a single product at a selling price of $43 per unit. The estimated sales volume for the next six months is as follows: March 6,100 units June 8,000 units April 7,000 units July 9,300 units May 10,400 units August 6,400 units All sales are on account. The company's collection experience has been that 43% of a...

Freese, Inc., is in the process of preparing the fourth quarter budget for 2016, and the...

Freese, Inc., is in the process of preparing the fourth quarter budget for 2016, and the following data have been assembled: The company sells a single product at a price of $61 per unit. The estimated sales volume for the next six months is as follows: September 7,800 units October 7,200 units November 8,400 units December 12,000 units January 5,400 units February 6,000 units All sales are on account. The company's collection experience has been that 30% of a month's...

ABC Company is in the process of preparing a budget for the upcoming year. The marketing...

ABC Company is in the process of preparing a budget for the upcoming year. The marketing department has just increased the number of units in the sales budget by a significant 50% as compared to the last sales budget that was prepared for the year. Explain the impact this change will have on the Contribution Margin Income Statement. Be specific about… how the components of the Income Statement will be affected. what company managers must do differently to implement the...

Freese, Inc., is in the process of preparing the fourth quarter budget for 2016, and the...

Freese, Inc., is in the process of preparing the fourth quarter budget for 2016, and the following data have been assembled: The company sells a single product at a price of $70 per unit. The estimated sales volume for the next six months is as follows: September 10,400 units October 9,600 units November 11,200 units December 16,000 units January 7,200 units February 8,000 units All sales are on account. The company's collection experience has been that 30% of a month's...

As part of the process of preparing the master budget for the coming year, you’ve been...

As part of the process of preparing the master budget for the coming year, you’ve been asked to perform what-if analyses, in the form of scenarios, on the original planning assumptions regarding Product A produced by your company. The following are the baseline planning data for the coming year for this product: Sales volume (annual, in units) 2,500 Selling price per unit $ 1,500 Variable cost per unit $ 1,000 Fixed costs (per year) $ 200,000 Required: 1. Based on...

Justin Company is in the process of preparing its budget for next year. Cost of goods...

Justin Company is in the process of preparing its budget for next year. Cost of goods sold has been estimated at 60 percent of sales. Merchandise purchases are to be made during the month preceding the month of the sales. Button pays 60 percent in the month of purchase and 40 percent in the month following. Wages are estimated at 20 percent of sales and are paid during the month of sale. Other operating costs amounting to 10 percent of...

Company is in the process of preparing its budget for next year. Cost of goods sold...

Company is in the process of preparing its budget for next year. Cost of goods sold has been estimated at 60 percent of sales. Merchandise purchases are to be made during the month preceding the month of the sales. Button pays 60 percent in the month of purchase and 40 percent in the month following. Wages are estimated at 20 percent of sales and are paid during the month of sale. Other operating costs amounting to 10 percent of sales...

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending...

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Beginning Inventory Ending Inventory Finished goods (units) 27,000 77,000 Raw material (grams) 57,000 47,000 Each unit of finished goods requires 2 grams of raw material. The company plans to sell 620,000 units during the year. How much of the raw material should the company purchase during the year?

Freewheel is in the process of preparing its master budget for the six months ending December...

Freewheel is in the process of preparing its master budget for the six months ending December 19X2. The balance sheet for the year ended 30 June 19X2 is estimated to be as follows: Cost Deprec prov NBV Fixed assets 140.000 14.000 126.000 Current assets Stock 25.000 Trade debtors 24.600 Bank 3.000 Net current liabilities 52.600 Creditors Amount falling due within one year Trade creditors 25.000 Other creditors 9.000 34.000 Net current assets 18.600 Total assets less current liabilities 144.600 Capital...

Cash Disbursement Timber Company is in the process of preparing its budget for next year. Cost...

Cash Disbursement Timber Company is in the process of preparing its budget for next year. Cost of goods sold has been estimated at 70 percent of sales. Lumber purchases and payments are to be made during the month preceding the month of sale. Wages are estimated at 15 percent of sales and are paid during the month of sale. Other operating costs amounting to 10 percent of sales are to be paid in the month following the month of sale....

Subjects