Sales budget planning for technical support

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[Music] okay once again good afternoon class with afternoon bsa21 and today we're going to discuss financial planning and budgets sometimes they call it master budget in discussion and master budget okay so let us first define or uh elaborate condobank sabine and financial planning so when you say financial planning we try to analyze the investment and financing or financing alternatives available to a firm so with all the projects that we have or that the firm has in their uh mind or management has in their mind uh project sato and of course financing alternatives how do they finance through anuba through debt through a loan through uh issuance of stocks in sa retained earnings source non-financing projects and so with all those uh things the investment opportunities the projects and financing alternatives uh later on they will come up with this forecasting uh human official consequences of those items so the pros and cons of investments or dino financing alternatives in sources of uh funds so they are going to weigh in alternative okay so we have separate topics on that in some other sources of financing in the cost of capital that is with financial management but at this point uh good solution that the financial planning that we are referring here ayumanga short-term so you say investments nato there might be investments in the long term short-term capacity [Music] so usually one year or less it could be for the quarter it could be for the semi-annual or half of the year or it could be monthly in amount of plans long okay so with all those plans in mind what are the future consequences of the alternatives because in planning we do make decisions so with all those alternatives how do we choose which one to uh implement oops so union number three deciding which alternatives to undertake and also we measure subsequent performance so italian pineal we implement the project or itoipine financing alternative so we measure the subsequent performance against established goal so parallel variance analysis only only we compare the actual versus the plan that we had uh set up okay so here is the finance financial planning model we have the ipo inputs your process and then your output so alabama input is some financial planning process you have to consider una yoma korean financial statements more okay okay previous years financial statements because from those financial statements we could come up with our prediction in the future pero with along with the uh financial statements that would he consider mourinho assumptions about the future conditions especially 19 pandemic financial statements nothing in the future hindi predict financial statements possible so that during our planning process not in magagawa or must consider not the latin factors in coming up with our for with our projected financial statements okay ima proforma so for the for the next uh quarter or for the next half of the year or for the entire year okay so we also come up with the operational and operational budget or financial budgets but i think you have an idea uh on this because of your uh other subjects like financial management okay and we have the scenario analysis maritime worst case and best case scenario what if affected by in 2022 2023 and so on affected parenthood or non-pandemic uh operations so most likely instead of one thousand units i'm a benton bahama 700 units in best case scenario just in case maritime scenario analysis so yeah a financial planning process for usually we start with the sales forecast peru the entire financial planning process would really uh be based on the strategic planning that the company is doing i mean the the budget bhagavatam budget strategic planning industry is strategic planning don't access our goals and objectives and company and then from there they developed mention and normally the first budget no negotiating is the sales budget but it's quite different with the sales forecast sales budget versus the uh sales forecast obsolete and no difference on the lower and sales forecasts involves human external factories and sales budget it is for example in the industry si jalibis mcdonald's kfc so anxious forecast nothing could uh involve the external environment and move for the entire industry and that 40 percent would be the basis of coming up with your sales budget exams is the external factors considered capacity's forecast in a google happen okay so after the sale after that we developed the production schedule from the sales that we have the anukarami will produce so that it will support young sales budget na na na 10 out of the sales forecast that we had okay so production schedule calculate the production costs of goods sold as well we also estimate the other expenses and revenues uh income statement nintendo's not no sales because of goods sold other expenses opex nothing and that's the time that we come up with the pro forma financial statements beginning with the income statement and then later on we complete then you attempt a balance sheet cash cash flow we complete also latin financial statements that we can come up with okay organized facility committee headed by budget uh director or budget coordinator yellow means a head and budget committee it depends on the company on how they want to call the head of the budget committee okay sometimes they just call it budget committee chair and then with some co-chairs and members of government so enrolled in budget committee is to formulate and decide on general policies relating to the firm's budgetary system on how it will be accomplished organization from the bottom i mean from the other uh from the employees uh known as a rank and file packet but middle management packet when on top management or paid up management along with the deciders later on the everything will be cascaded so depending on general policies on how they are going to accomplish the budget for the organization and after that they request review and revise kung sakaling meron man individual budget estimates from the different segments of the organization so you had the responsibility accounting the last time napoleon has some different segments organizations so when they solicit the proposed budget from those segments and so on okay so they approve the budgets and subsequent revisions they're in seleyonega approved and they receive evaluate and analyze budget reports and budget reports we compare you budget versus the actual okay we compare the budget versus the actual and then after uh analyzing come back may difference again new budget actually that's the time that they recommend necessary actions to improve operational efficiency and effectiveness and in other words so sometimes we just look at the budget reports here is the plan here is the budget if they spend if they perform within or very close to budget organization okay even without looking at their day-to-day activities now some financial planning terms before we move on so budget when plans are converted into quantitative terms we now call it budget okay and there are uh three ways for us to construct young acting a budget so we have top down mandated approach we also have a participative or bottom up and we have the blended approach and i know difference on top down participative and blended uh mandated approach most of the budgets or on participation in us attack management download one of the advantages is quick uh preparation time and clear communication of management objectives organization so when they come up with their budget champion objective organization the usual process is manga garlic moon is a lower level managers and then it will be submitted but as for the approval so on advantage of participative network uh employado like the lower level managers they will be uh most likely they would accept the budget and also the morale may be improved if you give chance or uh if you let the lower level uh part managers participate in the budget uh or in the financial planning process so ebay um participate major nakaka encouraging in the part of the lower level managers apparently they feel like they really belong and they and their voice is important in the organization okay advantages union disadvantage yeah so without the the participation of the lower level managers we don't really think they would embrace human as a lower level they would embrace the budget being uh cascaded they might view yungan situation your top down mandated approach the paramedia dictatorial and uh you know they may just accept they may not fully embrace it they would think now sobrang you have to wait for the lower level managers to finish their proposals major time consuming and the managers may try to pad uh their budgets management on how they can control or evaluate meaning there are some items na or some aspects in the budget style i tap down my items are you are really seeking the participation of the lower level managers so which one is better so it depends on the company kumalitano as an organization it always depends on the nature on the size of the uh organization okay so let's say this has been perfect because of uh people having the participation they would most likely they would embrace the budget of the company so master budget operating and financial budget pricing operating budget budgeted income statement financial budget kasama podiuto ayo ati cash budget balance sheet projected the balance sheet and permission means capital outlay budget okay or capital budget long term yes but the project would start next month so uh the this long-term project [Music] is preparing budget on its equipment needs on a on an ongoing basis with a new quarter being added to the budget as the current quarter is completed this type of budget is commonly known as what is it a capital budget is it a rolling budget is it a revised budget or pro forma budget again preparing budget on its equipment needs on an ongoing basis with a new quarter being added to the budget as the current year is completed this type of budget is most commonly known as what is this can i see your answers in the chat box butting in b [Music] the answer is rolling budget so being on rolling budget you prepare the budget for the four quarters first quarter once in the table another quarter in second quarter the budget is always for a year and every time one period is completed that is your rolling budget some answered for capital budget because of the equipment it might also be correct but the best answer is rolling budget because of some other uh definitions details are adding a question okay it might be a capital budget because equipment but then again it's a rolling uh budget because of the some other definitions okay so some other terms budget report i have mentioned earlier that the budget reports report shows the difference between the actual and the budget so it is simply performance management or a measurement of the performance okay a continuous or rolling budget continuous budget is also another term so uh it was explained a while ago another is the fixed or static budget only for one level of activity you budget not in peru if you consider uh you being dynamic so every time the actual uh is different from the budgeted the actual level is different we always adjust the variable component nothing's a budget yeah just to come up with the flexible budget but when we do budget report that but it on flexible budget aquino compare nathan versus our actual not the static budget and static budget again is because it is just for one level only okay so so there would be some changes and with all those changes and flexible budget okay so next zero-based start from scratch or from zero base or meaning every time you come up with a budget indicator meeting in some previews it's always a different thing you always uh justify every period there's always a justification uh as if uh well a telegram basis can ascertain our organization always start uh with all your justifications okay we also have what we call life cycle budget yum budget introduce a market that okay so basically it applies abc principles continuous improvement that's kaizen no expectations of continuous improvement into budgetary estimates that's kaizen budgeting so some other terms are familiar theories okay anupong starting point for a master budget is it direct materials purchase budget is it a budgeted income statement is it sales forecast or sales budget or is it the production budget [Music] so one difference between budgeting in for-profit and not-for-profit entities is that not for profit entities usually but uh just to elaborate and answer your answer nothing and not for profit i never budgeted expenses before revenues union difference near those among businesses not after some profit okay so nothing's uh yuma for profit a sales budget depo i expenses okay i am so let's talk about the budgeting process sonos from the sales forecast we will have the sales budget so generally generally i think budgeting process would really start with your sales budget and from the sales budget production budget and also if you are producing or even if you are not if you are selling the the items then whether merchandise inventory or finished loads inventory maybe no purchase style merchandise inventory or raw materials inventory so we also have the purchases budget depending on the sales budget and production budget nothing and in that way we can have the cost of goods sold budget paragraph sales uh sales nathan if we add the new item formula that it owns uh merchandising and manufacturing the beginning last purchases minus ending what do we have we have our sold merchandising manufacturing patio beginning i finished goods in the merchandise inventory plus produced [Music] if you still remember and then after that we can also come up with the ending inventory budget ending inventory or an amount of inventory or ilan units banks at the end of the period okay so will be your selling and marketing expenses at chaka young administrative expenses okay we also have the budgeted income statement so the sales minus cost of goods sold minus the opex the budgeted income statement okay and also we have the cash budget oops now our liaison core so at the other income so income statement and that's the time that you can come up with your budgeted balance sheet if you look at this operating budget data making allowance cash budget and your capital budgets okay so let's talk about the sales budget sales budget from by the way or if the company wishes to have all of their sales on credit so 100 would be on credit so mangala indiana collections budget collections and would depend on the bank credit terms nothing okay so i'm not in sales budget number one to learners have been attend we have the cash sales and the credit sales simply just get the total sales nothing for the month of january february and march period considering okay as simple as that long uh because you have to considering a outside environment is not that easy so you need the the the opinion of those who are expert in sales who are exposed in the sales division of the company or who are exposing the customers or in the operations so it might seem easy starting point budget okay my cash and credit sales so sempre for january feb and march we have the total sales okay how do we come up with the collections budget and number one more annual collection policy okay and collection policy is 60 collected in the first month or on the month of sale and then 30 percent will be collected the following month the 10 percent will not be collected maritime and collectibles so with that gecko valentine a simple table so january february and march alibi collection nothing this month and collection from last month so if you always have to check the collection policy for you before you come up with the correct schedule of payments i collections rather ok okay so let's move to the purchases budget ayan and purchases budget not then oh sorry depending on purchase merchandise inventory plus purchases minus ending equals sold to come up with the purchases budget and kailangan so rearrange so that would be sold plus ending minus beginning we have our purchases arranged will attend for the months of january 5th and and please take note that your budget could be expressed in terms of peso or could be expressed in terms of units okay how do we accomplish ending inventory an ending inventory not in [Music] okay so if that's the policy ending inventory and would be twenty percent of february it turned out twenty percent of march it in a month twenty percent of april so that's how we establish an ending inventory look for the policy how about the beginning so whatever ending here is beginning following month whatever ending year blah blah blah dito whatever ending here in the beginning first you have to look at your balance sheet and happiness i know an imbalance sheet as of 1231 known uh previous year i know and merchandise inventory balance nothing now 1231. 31. we can assume that the inventory policy was implemented even before pa ipsabian as of december you ending uh 20 percent on 20 two oops that's record sorry number two koala balancing look at the cuento look at the problem number three assume the inventory that inventory policy was implemented even before merchandising at manufacturing okay manufacturing uh beginning plus produce minus ending is your sold now production budget so uh sold plus ending minus beginning is your produced so that's the time that you rearrange your formula at production budget name okay says helping the purchase beginning plus purchases minus ending we have our used okay so production use plus ending plus ending minus beginning we have our purchases finally related the productions are used tina's habits examination for every unit of output made that long units of input so whatever compute most of production detail multiply electron three you know your number of units nah use nothing and adding uh inventory policy so 10 of next month 10 of next month 10 percent of next month so finally my beginning so ibaba along someone cannot produce sabbah so now output versus input multiplied so you have the number of units of materials used number of pounds by the rain and after that ending ending inventory policy on the ending aromats sabe 30 needs next month so putting 30 percent nito 30 nito 30 the following month funny beginning beginning time beginning funny beginning on romance again and after that you can come up with a purchases kapag manufacturing young process nothing okay merchandising on nature in a business or a type of business starting an unsolved past ending minus beginning purchases manufacturing the long steps production budget but going to come up with the purchases budget okay so actually the production budget slide okay so production budget for materials that was production budget for labor so budget so sold plus ending minus beginning we have our produce okay so for the months of january february and march again we just assume you appear you'd not end or your months not in okay so i'll not get the final answer so this time um inventory okay so we can have our production budget from the production budget since dl budget and dl budget one for so with that we have the dlh sabbah so multiplied pesos per let's say 80 pesos per hour 80 pesos per hour 80 pesos per hour so in multiplayer nothing you rate nothing we will come up with the direct labor cost or direct labor budget if you look at it it's not that difficult to uh to prepare yuma budget nothing we have our production budget top was from the production budget o h per unit multiplier we have the overhead just be careful budget production federal overhead budget opex opex for example we have the rent we have the advertisement we have the salaries and uh we have the wages salaries and wages okay and wages i variable okay so going attend for the month of january february and march contract of lease or lease contract let's say 100 000 per month so that would be fixed for all the months not in okay how about advertisement it means 70 to 5 of sales so whatever sales that you have junior mcgee amount na nandito so imma multiply them in attend somewhat with our sales salary is fixed let's say 200 000 so as simple as you are really completing the table or the uh budget for the for january 5th and march we just let's say 10 percent of sales you know we're just not in so he will come up with your opex objects like depreciation expense let's say fixed 25 000 per month so that at the end of the process we will come up with the total opex kuma kano many okay so we have the opex budget now an opex budget for a pending management disbursement budget actually opex budget not just budget but he purchases nila uh 50 bina bayaran on the first month or on the month of purchase pero another 50 percent binabayaran the following month so opex in other words just look for the disbursement policy okay parama platmo makano disbursement this month mckinnon disbursement out of the last month commitments and after that we have our cash available or ca okay for january feb and march and beginning at 10 collection snatter from collection budget cash available is the sum of your cash beginning and your collections available enough number one disbursements versus nothing number one capital so that at the end of the period excess or deficit after all your actions zero now meccano cash beginning not in fact in february fifty thousand young mcr minimum cash requirement okay the company really said that indeed nothing in the bank okay another scenario so i'm adding uh total disbursements amounted to three hundred thousand long that was a minimum cash requirement like fifty thousand so may access time one fifty thousand so what do we do we invest or invest depends on the company [Music] 473 thousand five hundred that's so what do we do low nathan 23 500 institutions loan is six thousand five hundred okay over puna nakash the following period would be fifty six thousand five hundred magnum scenarios now they can only borrow at an increment of ten thousand or five thousand and so on they can borrow only at increment of ganito of ghanian just stick with the loan amounting equal to the deficit which is twenty three thousand five hundred okay input you denied nothing or in emphasize nothing's a cash budget now budgeted income statement a alumni children's income statement not then we have our sales we have our cost of goods sold we are we have our gp minus of x we have our operating income now for january 5th and march salmon sales budgets of goods and after that we have our operating income and regarding the interest and the taxes so in other words this is our budgeted income statement out of the schedules or out of the operational or operating budget okay so next is the budgeted balance sheet so we have our asset liabilities and capital a or or shareholders equity or partners equity okay so depending upon all your assets asset should be equal to the plus uh capital or partners equity and emphasized [Music] on calculator because in a while also we will have our uh problems okay which of the following will occur if legio's actual sales in may are lower than its budgeted sales for that month is it a lidio won't have enough cash to cover bills requiring payment in may or is it b lydia's actual inventory at the end of may will be higher than budgeted or is it c uh legious actual purchases in june will be higher than budgeted or is it d all of the choices answer analysis actual sales enemy lower than the budgeted seals okay very good okay next let's have this problems now okay i'm going to give you a minute let's say to solve for this one uh the company desires an ending inventory of 120 000 it expects sales of two hundred forty thousand and has a beginning inventory of eighty thousand pesos what is a cost of sales is sixty percent of sales and budgeted purchases are blank so i'm giving you one minute to answer this problem okay okay so my answer is not in the chat box but we will be waiting for the answers of the from the others i'm gonna answer [Music] we have our purchases so i'm sold nothing i 240 000 pero sales why cost of goods sold 60 sometimes 60 percent okay an ending putna in i 120 thousand i'm beginning putting that in i 80 thousand so you are correct this is 184 thousand all right so this time let's solve for the next problem okay so mom she incorporated budgeted purchases of two hundred thousand cost of sales was two hundred forty thousand and the site ending inventory was eighty four thousand the gross profit rate is 40 percent the beginning inventory was blanca kind of a beginning inventory for nathan okay all right so karamiyan 124 thousand so let's all for this so we have our sold oops plus uh ending minus beginning we have our production or produced okay so 18 000. sorry sorry sorry so we have we have the minus purchases this time so we can have our beginning inventory and sold puna 10 i because of sales 240 000 and ending richness corporation budge uh corpse uh budgeted sales of 18 000 units so the budgeted beginning inventory was three thousand and the budgeted ending inventory was five thousand units a budgeted production i lean 18 000 5000 i'm beginning 3 000 so therefore i'll produce units nothing i 20 000. okay that's for the next problem okay so hopia had budgeted sales of 44 000 units for january and sixty thousand for february so the budgeted by beginning inventory for january one was fourteen thousand units opiate desires and ending inventory equal to one half of the following months sales needs so budgeted production for january is blank so i'm giving you 30 seconds to answer this one okay so let's solve for this production so plus nd minus beginning so we have our produced for the month of january so on sales not 10 for january is 44 thousand ending i equal to one half of the following months sales so um february 99 60 000 so half no ni 30 000. 14 thousand so therefore an answer punatin 44 plus 30 minus 14 that would be 60 000 units again okay very good so that's what i answered for sixty thousand units okay so let's have this another example so budapest foods corporation manufactures a single product it keeps its inventory of finished goods at 75 percent the coming months by today's sales inventory of raw materials at 50 of the coming months budgeted production needs each unit of product requires two pounds of materials the production budget is in units to may 1000 june 1 2 july 1300 august 1 600 and raw materials purchases in june would be how much so i'm giving you a minute to solve for this one okay so let's now answer the problem okay i manufacturing company we start with the production budget first but the students answered for the same number of units so be careful with that okay so we will start with the production budget immediately you know so for the month of june 1200. we have to come up with the purchases so use plus ending minus beginning we have our purchases each unit of product requires two pounds of materials okay so times two po parasa use inventory of raw materials at 50 percent of the coming months budgeted production needs budgeted production needs so therefore fifty fifty percent of the coming months production needs so that would be one thousand three hundred okay and beginning we will assume that the policy uh uh was implemented even before so you i think may in beginning mito are you ending may would be 50 po nito 2 4 which is one thousand two hundred so in other words one thousand two hundred fifty percent therefore the answer in the purchases is two thousand five hundred units two five to five fifties oh yeah so be careful it's two thousand five hundred units okay foreign [Music] okay all right yeah so nothing so make sure nanaka so next yeah and so we have here about we have to prepare a merchandise purchases budget showing how many units should be purchased for each month of april may and june and we have to prepare a schedule of expected cash collection for each month of april may and june then okay so how do we prepare the purchases budget april may and june so uh merchandising so sold plus ending start merchandising so that would be purchases mechanisms check not in your sales budgets sales in units 60 75 and 90. for april may and june so that's sixty thousand seventy five thousand and ninety 000. funny ending nothing's uh merchandise inventory nothing so the board of directors has established a policy to commence in april that the inventory at the end of each month should contain 40 of the units required for the following month's budgeted sales so 40 now 75 000 so 30 000. that's it that's 36 000 and then 40 percent of uh july 40 of july which is 81 000 again and that's july 81 000.40 of that is thirty two thousand four hundred a year funny beginning not ten so in thirty thousand april thousand thirty six thousand of me and italian okay twenty four thousand pounds again at thirty eight thousand units we will assume this na siem language policies so twenty four thousand puang ilala so with that i'm adding purchases for the month of april 50 2000 for the month of may 81 000 and for the month of june that would be 30 i don't know that would be 86 400 okay again so asap prepare a schedule of expected cash collections for each of the months of april may and june satoshi collection april may and june i know on kailangan for cash 120 000 pesos ito i 150 000 pesos two pesos times seventy five thousand so two times ninety so that's one hundred eighty thousand pesos a yen so another thing collection spontaneous one-third of sales are paid by the customer are paid for by customers in the month of sale okay month of sale stops the balance which is two thirds is collected in the following month uncollectibles okay collection from this month collection from last month so that would be your total collections okay so for this month's habit one third nang sales so that would be forty thousand from collection from last month on march 31 85 000 so we assume that credit sales so eighty five thousand okay so total collection saturn i 125 000 for the month of april 130 000 for the month of may and 160 000 for the month of june i am possible question in the exam makano comes to see the ball as of june 30. makano accounts on june 30. can i see your chat box in our chat box makano accounts receivable on june 30. anybody my camera arn on june 30. correct so as of june 30 uh i'm adding uh accounts receivable i 120 000 which is two-thirds nanjoon very good so antanomalay this time magano on sales march mccann okay so i'm saying some march from your 85 000 here in a collection from last month it represents two-thirds non-sales march so eighty-five thousand divided by two-thirds soybean sub-n one twenty-seven five hundred and sales march correct okay so uh let's proceed with problem one uh problem one uh okay so a lot of space is a problem too okay so a sales budget is given a sales budget is given i remember this problem then you know a production budget is given so be careful ah so a sales budget is given below for one of the products manufactured by the aj company okay so for january to june uh budget the inventory of finished goods at the end of each month should equal 20 of the next month's sales however on december 31 the finished goods inventory totaled only 4 000 units each of you the product requires three specialized electrical switches so mere natan ratio one is to three one output three input since the production of these specialized switches by aj suppliers is sometimes irregular the company has a policy of maintaining an ending inventory at the end of each month equal to 30 of the next month's production needs this requirement had been met on january 1 of the current year requirement determine the quantity of switches to be purchased each month of january february and march and in total for the quarter okay so let's answer for this one we don't have a space for this ayan so for problem number two so we have here um for the month of january february and march uh purchases so sold plus ending minus beginning we have our produced units for january feb and march we have 21 000 for january 21 000 so 21 000 36 000 and 61 thousand thirty six thousand and sixty one thousand okay and then look at the policy goods s twenty percent of next month's sales of a liquid io twenty percent of next month ending nothing so twenty percent and thirty six thousand eight seven thousand two hundred twenty percent down sixty one i it's 41 000 so 20 percent of that that's 8 000 200 samaritan ending beginning 72 12 200. produced for feb and march how about for january beginning balance sheet long balance sheet making uh was a beginning of finnish goods yes 4 thousand units okay for february that's 41 000 for march that's uh 57 thousand okay and apply purchases so sabinat and tatavitayas are used plus ending minus beginning we have our purchases annual ratio one is to three kind of multiply nothing you produce units with three uh units of specialized electrical uh electrical switches again so times three po so this is 72 600 times three 123 thousand times three 171 thousands uh suppliers electrical switches the company has a policy of maintaining ending inventory now equal to 30 of next month's production needs okay so 30 long next month so for january 30 of 123 000 is 36 900. and this one 30 percent of 171 is 51 300 and eternal fall 30 of april 000 117. march 30 of 117 that is 35 100. beginning 36 900 deto baba 51 000 300 palo january cutting in correct 21 788 so twenty one thousand seven hundred eighty k and a man and purchases nothing i eighty seven thousand 720 for january times 137 400 for february and 154 thousand eight hundred for march okay uh for antenatal then a for the quarter just get the total of all these three three seventy nine thousand nine hundred twenty so you can put your total electrical switches not in for the uh quarter okay so we're done with problem number two okay so let's have this problem number three uh direct labor budget okay so we have here the uh for the next three months antenatal on a budget for gd corporation uh gd working jd corporation is working on its dl budget for the next three months each unit of output requires 0.3 directly per hour the direct liberate is 70 pesos per dlh the production budget calls for producing a production of production budget costs for producing eight thousand nine thousand and ten thousand units for april may and june respectively okay so april may and june nasa production budget napoleon h per unit so therefore undeal h naught n multiply not in a point three so that would be two thousand four hundred diva that was for the month of uh may that would be two thousand seven hundred tapas for the month of june that would be three thousand you know ideal budget for so that's 168 thousand so 2 7 times 70 that's 189 thousand and also 3 times 2 times 70 3 000 times 70 that's 210 000 pesos direct that we're going to pay for our direct laborers the the company guarantees it's directly for workers a 40-hour paid work week summer minimum guaranteed wage with the number of workers currently employed that means that the company is committed to paying its direct labor workforce for at least 2840 hours in total each month if there is not enough work to keep them busy so 840. to 849 times 70 pesos that's 198 thousand eight hundred kayaman if this is the minimum guaranteed wage and direct labor budget nothing detail would be for the month of april the answer is 198 800 whichever is higher between the minimum guaranteed wage and the actual direct labor cost okay for the month of may 198 800 union okay it is the actual that will prevail so on direct labor budget that then would be it on set of data nato because of the additional data minimum not guaranteed wage okay again minimum guaranteed wage like in this case muslimat assad thirty thousand eight hundred for the month of april with thirty thousand eight hundred and the friends napoleon overhead pero for the sake of computing the young direct labor budget how much to shell out for the dl uh workers that's not 198 800 okay because of the minimum guaranteed wage later on so h indifference bro that's in cos accounting now when we talk about budget here in strategic cost management and prepare non-company non jd corporation it's not just 168 but 198 800 okay so uh problem number four so the redeemer company has obtained the following sales forecast okay so for july august september and october the regular pattern of collection of credit sales is 20 in the month of sale 70 in the month of uh in the month following the month of sale so 20 70 what happens to the 10 percent i'm going to collect up your remainder 20 70 and 10 percent and collection attend okay there are no bad debts on budgeted er balance on september 30. so number one monetary on september 30. okay so let's compute for the budgeted ar on september again september september 144 000 22 000 and you are correct 166 thousand okay so this time i'm giving you few more minutes or seconds to answer for number two makano and cash receipts now october okay so cash receipts now october our cash collections oops yeah collections october number one new cash salesman 60 000. number two your october sales nations right so that would be 40 thousand so september sales not in the 180 000 october remember on the second month it's 70. so multiplying 70 percent so mccannion 126 thousand so for the month of august yes 220 000 times 10 so that's 22 000 okay i'm answering nothing at 148 thousand okay so it's 248 don't forget the cash let's say that's an edition total collection except unquestioned mccann on budgeted cash receipts out of the credit sales for october again the budgeted cash receipts from credit sales for october 17 60 000 but be careful with that okay so let's have this problem number five you are asked for the excess or the efficiency of cash available over this bear disbursement for july so on given punatin ml corporation is preparing its cash its cash budget for july the budgeted beginning cash balance is twenty five thousand budgeted cash receipts total one forty one thousand and then the budgeted cash disbursements total one thirty nine thousand the decide ending cash balance is thirty thousand along the excess or the efficiency of cash available over disbursement for july so please let me know meccano accessor deficiency of cash available over disbursements for july okay i i i received one answer now okay oh yeah total disbursement i one thirty nine thousand antenatal cash available over disbursement lang so antifreeze puny and i 27 000 so that's the answer in number one okay uh cash required mo i 169 thousand in in fact merit ion deficiency na 3 thousand comma deficiency in a 3 000 that is the amount of money that we should borrow so answers the number two i three thousand pesos okay so be careful with the i know with this kind of problem cash available over disbursement you have to be very careful with that okay next problem with io so we have here a more comprehensive problem so this time we have a balance sheet beginning inventory okay so we have here the balance sheet we have here some other data about the raquel farm supply uh so this is a small town in a small town in the rural west the data regarding the store operations follow requirements please take note that we are going to ignore the taxes okay so we are uh going to uh compute for the expected cash collections in december so in cash collections december and january so 290 310 and 210. so november december january uh-huh we need the collection policy collection collections are expected to be 65 in the amount of sales so 65 33 in the following month 33 and two percent uncollectible a pattern of collection or collection palestine attend so therefore going for nathaniel collection a collection in december in december okay so we have your collection from this month and collection from last month so uh 65 33 and 2 percent collection nothing okay so december so that would be 201 thousand five hundred sixty-five percent of 210 310 000. and from last month 33 of 290 000 right so that's 95 700. so i'm total collection that then for december i 297 000 two hundred so that's the answer in number one okay okay um from this month 290 000 times 65 000. i 65 percent right there so that's 188 500. last month last month net of allowance for uncollectible accounts malik so that's 77 000 so total collections for the month of november is 265 500 a.m how about for the month of uh january so sixty-five percent now two hundred ten thousand so that's one thirty six thousand five hundred and thirty three percent and three hundred ten so that would be one hundred two thousand three hundred so total collection for the month of january is two hundred thirty eight thousand eight hundred you know plato and nothing but the answer in number one is 297 200. 297 200. okay number two the total cost of merchandise purchases so merchandise but iotas purchases minus beginning we have our purchases for the months of november december and january for the month of december the cost of goods sold is eighty percent of your sales sales budget in units supposed to because everything here in the in this table in this budget 80 of 200 sorry 90 000 that's 232 000 pesos and then for this one 310 000 times uh 80 so that's 248 thousand and for january it's 168 thousand okay now for the ending purchases the company purchases seventy percent of its merchandise in the month prior to the month of sale and thirty percent in the month of sale so lumalabaspo policy is not on the inventory but on the purchases 70 in the month prior to the month of sale and uh the 30 percent calendar 30 70 in the month prior to the month of sale and 30 in the month of sale okay so antanoma canyon purchases nothing on december so short i only 30 percent december pero young 70 is it 70 percent in november or january so may i know humacanuang purchases december politico 70 in the month prior to the month of sale i took a 30 of the uh in the month of salem 70 of its merchandise in the month prior to the amount of sale and 30 in the month of salo malik so please give me the amount of the purchases on december okay there are two answers that came in [Music] or hesitate because it's okay so 192 000 so let's try sultan attend 70 in the month prior to the amount of sale yeah 192 000 so and i think you are correct so seventy percent of one sixty eight cubic you are anticipating uh one sixty eight billion in thirty percent of two forty eight so with that around seventy percent of 168 so that's seventy four thousand four hundred that was thirty percent of december now two hundred forty eight thousand so that's one seventeen six hundred and you are correct that it's not one hundred ninety two thousand okay so meccano per magana may purchase system november makani purchases on november so that would be 70 of 248 and 30 than 230 2000 so the answer is 243 200. yeah and thank you uh bernadette yeah 243 to 100. for january nothing was solved in general data 192 number three december cash disbursement for merchandise for uh merchandise purchases aluminum rule nut is a merchandise payment for merchandise is made in the month following the purchase ayan so makanu disbursement known december for the purchases on disbursement and on december related to purchases next month so therefore on disbursement monday december i in 243 thousand on november magano because all your purchases would be paid the following month okay 239 000 disbursement economy okay so thank you so let's go back to the next question this is december cash disbursement i'm so good at indito i 243 200 okay so with 200 baht yes or deficiency of cash available over disbursement for december so what we are trying to prepare this time is your cash budget okay so let's prepare your cash budgets so we have the cash available minus your disbursement itemized minus the mcr so we have either excess or deficiency okay so for november december january so that would come from your balance vietnam october 31 so that would be kashna 25 000. slides so that would be uh 25 000. okay remember we have our collection a computation or budget prepared detail and it's 265 500 for november the buy collections okay so 265 500 but so that would be 265 500. so on cash available putna 10 i 290 if you remember not 239 thousand how about with the opecs uh other monthly expenses to be paid in cash are twenty one one hundred monthly depreciation are twenty is twenty one thousand so it's only the twenty one thousand one hundred deficiency or a total requirement before we identify the excess or deficiency and total requirement ni 200 60 100. four hundred chennai and mismo uh mcr okay some collection in december that's 297 200. 297 200 available more i 327 600 okay so on disbursement mode related to purchases i 243 200 if you remember that's a monthly opex my 21 100 so in total requirement not in a 264 300. so on excess cash available over disbursement now 264 300 i 63 300 and that's our answer in our problem uh 64 000 i no no that's 63 rather 63 thousand net income for december so now budgeted income statement so sales cost of sales per cost of goods sold we have the gp minus the opex we can go back here so it's 310 000 control p i could take control p in three hundred ten thousand okay so a mechanical cost of goods sold eighty percent right so eighty percent is 248 thousand okay excuse me so on gross profit i 62 000 i am so makani opec remember my deposition expense net income not in detail do you still remember depreciation expense on d e naught and i 21 000 every month okay so please let me know makano net income now december in december okay please put that in our chat box are you single and adding a solution and i itemize opex okay so we have the 2100 cash opex we have the twenty one thousand so mechanical operating in component please don't forget your bad debts expense okay yo okay so this is our cash opex cash opex accounts receivable okay it's 102 300 correct so 102 300. now january you know 33 than 310 so correct so 100 to 300. makani accounts payable at the end of december accounts available at the end of december the entire purchases the opium purchases nothing right the entire purchases would be the accounts payable at the end of december because all the purchases of merchandise i are paid the following month so it's 192 thousand okay so that's 192. performing for the sake of computation of retained earnings so 311 400. my income plus but my loss minus but my dividends minus so makano and retained earnings nothing now december 21. 10 31 antenatal i retained earnings as of 12 31 so i'm cool okay let's try two three five three hundred so let's try to solve okay so on november so on sales for nothing in november 290 thousands 80 which is 232 thousands on gross profit nathan i depreciation expense at 21 000 but that's not in ninety thousand which is five thousand eight hundred okay so i'm operating income november is ignoring the income taxes foreign thousand one hundred kilometers which is 23 800. 5 200. that would be the retained earnings on december 31 okay so just to complete 100 pesos okay so 335 200 so if we go back so that the final answer here it's uh three three five two hundred i gonna put answers nothing's at incomprehensive example on master budget okay so question so far chat box [Music] being at this point are you adding uh limitations it's a budgeting okay there are limitations that's of course so young budget the plan itself as well as the figures they're in are merely estimates may not happen exactly as we uh planned yuma activities in ion okay and also we have a budgetary system requires the cooperation and participation of all members of the organization department every data or everything or every data in the budget will be affected remember budgeted budget for example the purchases budget would be a signal to purchasing department purchase policy nothing on disbursement applying the palisades they should ensure also that they would pay as planned sales budget but they should exact effort also meet telegram target but at the end of the day we will just uh make sure personal organization exactly as we wanted those data to be okay so budget restricts their investments and limits their decision making powers managers within the budget so sometimes that that is not really a good sign so major will make cutting restrictions like the thing doing as a decision making power you can only decide up to that limit and time-consuming apple and too costly for some organization sobrantagal govern especially if you choose the participative approach so uh at the end of the day kappa guarantee which is ing to the plan or budget okay so with that i'd like to thank everybody for attending today's session and i hope you have learned something from our discussion on financial planning and budgets okay so have a great [Music] day you