Academic Tutorials

English | French | Portugese | German | Italian
Home Advertise Payments Recommended Websites Interview Questions FAQs
News Source Codes E-Books Downloads Jobs Web Hosting

Managerial Accounting
Managerial Accounting Introduction
Managerial Accounting Income & Earnings
Managerial Accounting Cash Flows
Managerial Accounting Analysis
Managerial Accounting Concepts
Managerial Accounting Job Order
Managerial Accounting Process Costing
Managerial Accounting Profit Analysis
Managerial Accounting Incremental
Managerial Accounting Budgeting
Managerial Accounting Cost Systems

HTML Tutorials
HTML Tutorial
XHTML Tutorial
CSS Tutorial
TCP/IP Tutorial
CSS 1.0
CSS 2.0
XML Tutorials
XML Tutorial
XSL Tutorial
XSLT Tutorial
DTD Tutorial
Schema Tutorial
XForms Tutorial
XSL-FO Tutorial
XML DOM Tutorial
XLink Tutorial
XQuery Tutorial
XPath Tutorial
XPointer Tutorial
RDF Tutorial
SOAP Tutorial
WSDL Tutorial
RSS Tutorial
WAP Tutorial
Web Services Tutorial
Browser Scripting
JavaScript Tutorial
VBScript Tutorial
DHTML Tutorial
HTML DOM Tutorial
WMLScript Tutorial
E4X Tutorial
Server Scripting
ASP Tutorial
PERL Tutorial
SQL Tutorial
ADO Tutorial
Apple Script
PL/SQL Tutorial
SQL Server
.NET (dotnet)
.Net Mobile
C# : C Sharp
SVG Tutorial
Flash Tutorial
Media Tutorial
SMIL Tutorial
Photoshop Tutorial
Gimp Tutorial
Gnuplot Programming
GIF Animation Tutorial
Scientific Visualization Tutorial
Web Building
Web Browsers
Web Hosting
W3C Tutorial
Web Building
Web Quality
Web Semantic
Web Careers
Weblogic Tutorial
Web Site Hosting
Domain Name
Java Tutorials
Java Tutorial
JSP Tutorial
Servlets Tutorial
Struts Tutorial
EJB Tutorial
JMS Tutorial
JMX Tutorial
Programming Langauges
C Tutorial
C++ Tutorial
Visual Basic Tutorial
Data Structures Using C
Assembly Language
Forth Programming
Lisp Programming
Data Warehousing
CGI Programming
Emacs Tutorial
Soft Skills
Communication Skills
Time Management
Project Management
Team Work
Leadership Skills
Corporate Communication
Negotiation Skills
Database Tutorials
Operating System
Software Testing
SAP Module
Business Warehousing
SAP Basis
Material Management
Sales & Distribution
Human Resource
Customer Relationship Management
Production and Planning
Networking Programming
Corba Tutorial
Networking Tutorial
Microsoft Office
Microsoft Word
Microsoft Outlook
Microsoft PowerPoint
Microsoft Publisher
Microsoft Excel
Microsoft Front Page
Microsoft InfoPath
Microsoft Access
Financial Accounting
Managerial Accounting
Network Sites

Operational Budgeting

Previoushome Next

Operational Budgeting


This chapter deals with preparing and using budgets.  When preparing budgets managers won't be looking at specifics, they will look at the big picture.

They won't look at something like the route a delivery driver takes each day. They will be more concerned with the total monthly fuel costs for all the delivery trucks. The manager in charge of delivery trucks and drivers will be responsible for controlling delivery costs and working within the fuel budget for the month.

Any single budget will benefit a company. Several budgets can help even more. This chapter shows how to prepare a number of monthly budgets that fit together into a unified set. They give management the ability to manage various aspects of the business on both a short term and long term basis. 

Operating busiest are very short term, and deal with production and costs over the coming month. Capital budgets deal with the purchase of land, buildings and major machinery. These things don't happen every day, so capital budgets might span over many years. Budgets will span a time period relevant to the type of decision that relates to that budget. Short term decisions will use short term budgeting; long term decisions will use long term budgeting.

The monthly budget should be prepared in a certain order. This order follows a logical sequence to manage production and delivery of goods. 

  • Sales forecast
  • Production schedule
  • Manufacturing cost budget
  • Cost of Goods Sold and ending inventory budgets
  • Operating expense budget
The logical order should be clear to see. The sales department must forecast the demand for the company's products. Now that they know how much to make, the production schedule and manufacturing cost budget can be prepared. The production schedule budgets labor, machinery and materials into the production process in terms of units, not dollars. The manufacturing cost budget shows the cost of the inputs calculated in the production schedule. 

The COGS budget shows how much gross profit the company can expect to be generated by the month's production. The ending inventory budget shows the reserve of products that will be on hand to start the next month. Finally the operating expense budget will examine all the other monthly costs of running the factory. 

After preparing the short term budget, managers can update the capital expenditures budget, and update the budgeted financial statements. 

There are three elements to the budgeting process:

  1. planning and budgeting before production,
  2. overseeing production and operations during the month, and
  3. month end budget to actual analysis, and review of the month's results

Flexible Budgeting

There are two basic types of budgeting: static and flexible. A static budget assumes a set level of production. A flexible budget uses standard costs, and is adjusted relative to actual production. A flexible budget is a much better analysis tool. Static budgets rarely produce reliable results. Static budgets are widely used in government accounting, where results are less important, but staying within a legal budget is mandatory. 

Flexible budgeting starts with standard costs. After estimating sales and preparing a production schedule, the flexible budget can be prepared. The manufacturing and operating cost budgets can be prepared using flexible budgeting. The sales forecast can also be prepared using flexible budgeting.

The critical thing about flexible budgeting is the reporting that happens at the end of the month. After production, a budget to actual cost analysis is prepared, adjusted for the actual production that month. Favorable and unfavorable variances are identified and can be analyzed. 

Computer spreadsheet programs are a great tool for preparing flexible budgets. Once a budget template is created, the same format and formulae can be used over and over again, by simply updating a few pieces of information. A set of flexible budget worksheets can be combined, and linked together, so beginning and ending amounts automatically flow from one month to the next.

Be the first one to comment on this page.

  Managerial Accounting eBooks

No eBooks on Managerial Accounting could be found as of now.

 Managerial Accounting FAQs
More Links » »
 Managerial Accounting Interview Questions
More Links » »
 Managerial Accounting Articles

No Managerial Accounting Articles could be found as of now.

 Managerial Accounting News

No News on Managerial Accounting could be found as of now.

 Managerial Accounting Jobs

No Managerial Accounting Articles could be found as of now.

Share And Enjoy:These icons link to social bookmarking sites where readers can share and discover new web pages.
  • blinkbits
  • BlinkList
  • blogmarks
  • co.mments
  • connotea
  • digg
  • Fark
  • feedmelinks
  • Furl
  • LinkaGoGo
  • Ma.gnolia
  • NewsVine
  • Netvouz
  • RawSugar
  • Reddit
  • scuttle
  • Shadows
  • Simpy
  • Smarking
  • Spurl
  • TailRank
  • Wists
  • YahooMyWeb

Previoushome Next

Keywords: Operational Budgeting, Managerial Accounting , Managerial Accounting , Managerial Accounting tutorial,Accounting , Accounting Tutorial, Managerial Accounting tutorial pdf, history of Managerial Accounting , learn Managerial Accounting

HTML Quizzes
CSS Quiz
CSS 1.0 Quiz
CSS 2.0 Quiz
XML Quizzes
XML Quiz
XSL Quiz
DTD Quiz
Schema Quiz
XForms Quiz
XLink Quiz
XQuery Quiz
XPath Quiz
XPointer Quiz
RDF Quiz
RSS Quiz
WAP Quiz
Web Services Quiz
Browser Scripting Quizzes
JavaScript Quiz
VBScript Quiz
WMLScript Quiz
E4X Quiz
Server Scripting Quizzes
ASP Quiz
SQL Quiz
ADO Quiz
CVS Quiz
Python Quiz
Apple Script Quiz
SQL Server Quiz
PHP Quiz
.NET (dotnet) Quizzes
Microsoft.Net Quiz
ASP.Net Quiz
.Net Mobile Quiz
C# : C Sharp Quiz
VC++ Quiz
Multimedia Quizzes
SVG Quiz
Flash Quiz
Media Quiz
Photoshop Quiz
Gimp Quiz
Matlab Quiz
Gnuplot Programming Quiz
GIF Animation Quiz
Scientific Visualization Quiz
Graphics Quiz
Web Building Quizzes
Web Browsers Quiz
Web Hosting Quiz
W3C Quiz
Web Building Quiz
Web Quality Quiz
Web Semantic Quiz
Web Careers Quiz
Weblogic Quiz
SEO Quiz
Web Site Hosting Quiz
Domain Name Quiz
Java Quizzes
Java Quiz
JSP Quiz
Servlets Quiz
Struts Quiz
EJB Quiz
JMS Quiz
JMX Quiz
Eclipse Quiz
J2ME Quiz
Programming Langauges Quizzes
C Quiz
C++ Quiz
Visual Basic Quiz
Data Structures Using C Quiz
Cobol Quiz
Assembly Language Quiz
Mainframe Quiz
Forth Programming Quiz
Lisp Programming Quiz
Pascal Quiz
Delphi Quiz
Fortran Quiz
OOPs Quiz
Data Warehousing Quiz
CGI Programming Quiz
Emacs Quiz
Gnome Quiz
ILU Quiz
Soft Skills Quizzes
Communication Skills Quiz
Time Management Quiz
Project Management Quiz
Team Work Quiz
Leadership Skills Quiz
Corporate Communication Quiz
Negotiation Skills Quiz
Database Quizzes
Oracle Quiz
MySQL Quiz
Operating System Quizzes
BSD Quiz
Symbian Quiz
Unix Quiz
Internet Quiz
IP-Masquerading Quiz
IPC Quiz
Software Testing Quizzes
Testing Quiz
Firewalls Quiz
SAP Module Quizzes
ERP Quiz
Business Warehousing Quiz
SAP Basis Quiz
Material Management Quiz
Sales & Distribution Quiz
Human Resource Quiz
Netweaver Quiz
Customer Relationship Management Quiz
Production and Planning Quiz
Networking Programming Quizzes
Corba Quiz
Networking Quiz
Microsoft Office Quizzes
Microsoft Word Quiz
Microsoft Outlook Quiz
Microsoft PowerPoint Quiz
Microsoft Publisher Quiz
Microsoft Excel Quiz
Microsoft Front Page Quiz
Microsoft InfoPath Quiz
Microsoft Access Quiz
Accounting Quizzes
Financial Accounting Quiz
Managerial Accounting Quiz
Testimonials | Contact Us | Link to Us | Site Map
Copyright ? 2008. Academic All rights reserved Privacy Policies | About Us
Our Portals : Academic Tutorials | Best eBooksworld | Beyond Stats | City Details | Interview Questions | Discussions World | Excellent Mobiles | Free Bangalore | Give Me The Code | Gog Logo | Indian Free Ads | Jobs Assist | New Interview Questions | One Stop FAQs | One Stop GATE | One Stop GRE | One Stop IAS | One Stop MBA | One Stop SAP | One Stop Testing | Webhosting in India | Dedicated Server in India | Sirf Dosti | Source Codes World | Tasty Food | Tech Archive | Testing Interview Questions | Tests World | The Galz | Top Masala | Vyom | Vyom eBooks | Vyom International | Vyom Links | Vyoms | Vyom World | Important Websites
Copyright ? 2003-2024 Vyom Technosoft Pvt. Ltd., All Rights Reserved.