operating budgets. Construction of the operating budget of the enterprise. Development of budgets for other expenses Composition of operating and financial budgets

28.07.2020

Types of budgets

The overall approach involves the formation of a common budget - a work plan coordinated across all departments or functions for the organization as a whole. It consists of two main budgets – operating and financial budgets.

The operating budget shows planned operations for the coming year for a segment or individual function enterprises. In the process of its preparation, the projected sales and production volumes are transformed into quantitative estimates of income and expenses for each of the operating divisions of the enterprise.

The operating budget includes:

1.1. Sales budget.

The sales plan is determined by senior management based on research from the marketing department. The sales volume budget and its product structure, by predetermining the level and general nature of all the activities of the enterprise, affect most other budgets, which essentially come from the information defined in the sales budget.

1.2. Business expenses budget.

This budget details all expected costs associated with the sale of products and services in the future period. The sales department may be responsible for developing and then executing a sales budget.

1.3. production budget.

After establishing the planned volume of sales in physical terms, the number of units of products or services that must be produced is determined in order to ensure planned sales and the necessary level of stocks. Based on information about the desired stock level finished products at the end of the period, the availability of products at the beginning of the budget period and the number of sales units, a production schedule is developed.

1.4. The budget for the purchase / use of materials.

This budget determines the terms of purchase, types and quantities of raw materials, materials and semi-finished products that must be purchased to meet production plans. The use of materials is determined by the production budget and anticipated changes in inventory levels. By multiplying the number of items of materials by the estimated purchase prices for these materials, the budget for the purchase of materials is obtained.

1.5. labor budget.

This budget determines the necessary working time in hours required to fulfill the planned volume of production, which is calculated by multiplying the number of units of products or services by the rate of labor costs in hours per unit. The same document determines the labor costs in monetary terms by multiplying the required working time by the corresponding hourly wage rates.

1.6. General production budget.

This budget is a detailed plan of the expected production costs, other than direct materials and direct labor, that must be incurred to meet the production plan in the future period. This budget has two purposes: to integrate all budgets of overhead costs developed by production and service managers and, accumulating this information, calculate the standards for these costs for the upcoming accounting period to distribute them in the future period to certain types of products or other costing objects.

1.7. Budget for general and administrative expenses.

It is a detailed plan of the current operating expenses, other than expenses directly related to production and marketing, and necessary to maintain the activities of the enterprise as a whole in the future period. The development of this budget is necessary to provide the information that is required for the preparation of the cash budget, as well as for the purposes of controlling these expenditures. This information is also necessary to determine the financial result of the enterprise in the planning period. Most of the elements of this budget are fixed costs.

1.8. Forecast income statement.

Based on the prepared periodic budgets, it is necessary to develop a forecast of the cost of sales, using data from the budgets for the use of materials, labor costs and overhead costs. Revenue information is taken from the sales budget. Using expected revenue and cost of sales data, and adding information from selling and general and administrative expense budgets, you can prepare a pro forma profit and loss statement.

It should be noted that the preparation of this particular report is the last step in the preparation operating budget.

The operating budget is the budget of an individual Financial Responsibility Center (CRC). The Purpose of Operating Budgeting - Planning and Accounting for Results business transactions carried out by the respective CFD. In fact, the operating budget is a tool for delegating the powers and responsibilities of each CFD according to financial indicators assigned to it.

For each CFD, one (and only one!) Operational budget is drawn up. The total number of operating budgets at the enterprise is equal to the number of FRCs formed in it. So, in this quantitative ratio, respectively, the possibility of establishing a connection between the financial and budgetary structures is already visible.

For various financial responsibility centers that are engaged in similar activities, the content and, accordingly, the names of the articles and their groups of operating budgets may be the same.

An example can be Operating budgets for the center of income and expenses.

1. Revenue Center Budget "Business A"

1.1. Realization of the main products.

1.2. Finished products.

2. The budget of the income center "Business B".

2.1.1. Realization of the main products.

2.1.2. Services.

3. Budget cost center "Commerce".

3.1. Business expenses.

3.1.2. Salary of sales managers.

3.1.3. Sales commissions.

3.1.4. Fare.

4. Budget cost center "Marketing".

4.1. Business expenses.

4.1.6.1 Internet promotions.

Functional budgets

The economic activity of an enterprise can be represented as a set of certain functions. In general, the list of these functions can be represented as follows:

Sales;

Procurement;

Production;

Storage;

transportation;

Administration (management)

Financial activities;

Investment activities.

Articles of operating budgets, grouped on the basis of functional affiliation, form functional budgets. The purpose of compiling functional budgets is to determine the need for resources for various activities of the enterprise.

Each functional budget is compiled as a whole for the enterprise. So, the system of functional budgets of the enterprise forms its budgetary structure. In this way, Budget structure - is a system of functional budgets of an enterprise, in accordance with which there is a consistent planning and accounting of the results of its economic activity.

From the position of this definition, the core budgeting scheme certainly reflects the budget structure, since its blocks are nothing more than functional budgets.

A more detailed list of functional budgets, according to the above functions of the enterprise, can be considered as shown in Table. 5.6.

In table. 3.6 lists functional budgets at the top level. However, any of these budgets can be detailed in accordance with the needs of a particular enterprise. For example, if it makes sense for an enterprise to control not only production costs as a whole, but also their individual components, then Direct Manufacturing Cost Budget may in turn include Material budget, Energy budget, Depreciation budget etc.

Table 5.6

Example of a list of functional budgets

		Name of the budget

		sales budget
		Sales budget for own products
		Purchased Goods Sales Budget
		Fixed asset sales budget 03
		Sales budget for other activities
	The budget for the balance of finished products (GP) at the beginning of the period
	Budget for finished goods balances (FP) at the end of the period
	production budget
	Budget for work-in-progress (WP) balances at the beginning of the period
	Budget for work-in-progress (WP) balances at the end of the period
	Budget requirements for raw materials, materials, tools, etc.
	The budget of the balances of raw materials, materials, tools and others at the beginning of the period
	The budget of the balances of raw materials, materials, tools and others at the end of the period
	procurement budget
	The budget for the purchase of raw materials, materials, tools, etc.
	Goods Procurement Budget
	procurement budget
	The budget of goods balances at the beginning of the period
	The budget of goods balances at the end of the period
	Income budget for core activities
	Direct cost budget for core activities
	Direct Manufacturing Cost Budget
	Direct Selling Budget
	Overhead budget for core activities
	Manufacturing overhead budget
	Business overhead budget
	Administrative expenses budget
	Income budget for financial activities
	Financial Activity Expenses Budget
	Income budget for investment activities
	Income budget from other activities
	Budget for expenses for other activities

Budget type designations:

DV - income - expenses; RGK - cash flow; HB - naturally - cost.

If necessary, you can continue to drill down one more level when material cost budget detailed on raw material budget(including the main types are considered separately), Budget materials. The budget of components (again, highlighting the main types and (or) suppliers), etc.

On the basis of budget indicators, the final financial result is also formed: profit / loss or net cash flow (cash balance). The company can also create additional budgets- not to calculate the financial result, but to control functional areas in certain cuts. For example, if you need to manage the costs of wages throughout the enterprise are payroll budget, which it is advisable to consider separately, in the context of production, commercial and other expenses. However, in any situation, one should take into account the relationship between operating and functional budgets; for trade, they are schematically presented in Fig. 5.1.

Rice. 5.1. Relationship between operating and functional budgets

Let us characterize the Consolidated (Final) budgets of the enterprise. Each functional budget belongs to one of three types of budgets.

1. In-kind - cost (Budget of goods, stocks and non-current assets).

2. Budget of income and expenses (BDR).

3. Cash flow budget (BDDS).

According to this classification, functional budgets are summarized throughout the enterprise and form the corresponding final budgets. So, Direct Production Cost Budget, Overhead Budget, Selling Cost Budget, etc. are grouped and together form a final income and expenditure budget (BDR), a Income budget for core activities, Payment budget for direct production costs, Overhead payment budget, Business payment budget, etc. - final Cash Flow Budget (BDBS).

Many enterprise operations affect all three of the resulting budgets. So, the sale of products will be displayed in the budget of goods, stocks and non-current assets as a shipment of finished products and, accordingly, basically, in the budget of income and expenses - as an accrual of income from sales, and when the buyer pays for this product in the cash flow budget (BDDS) - as cash receipts from sales. Consequently, the functional Sales Budget is compiled in the context of the movement of goods, income and money flow and, accordingly, takes part in the formation of all final budgets (Fig. 5.2).

Rice. 5.2 Relationship between functional sales budget and final budgets

Thus, final budgets are needed not only for planning financial results, but also for tracking "remote" and "side" effects of changing certain points in the strategy and tactics of the enterprise, as well as for reasonable adjustments to the budget as a whole. Let's consider them in more detail.

Income and Expenditure Budget (BDR) reflects the formation of the economic results of the enterprise. The purpose of its compilation is to manage the economic results of the enterprise, that is, its profit and profitability. Under the economic results in this case we understand the result of the production and financial activities of the enterprise, reflecting the change in the value of the property of the enterprise. He shows:

Enterprise income - in total and (or) detailed according to one or another criterion (CFD, source of receipt, etc.);

The expenses of the enterprise in the total volume and (or) are detailed according to one or another criterion (CFD, direction of expenses, costing item, etc.);

The difference (i.e. profit or loss) between income and expenses for a given period.

Based on these data, using certain analysis tools (primarily factorial analysis of profits), you can:

Develop a planned volume and determine the value of each source of income in the total volume of both income and profit. Such information is necessary for the development of the company's marketing policy, its production program, and the like;

Identify cost items that it makes sense to influence in order to improve financial results (identify cost items that have savings reserves).

The format of the budget of income and expenses (sequence and grouping of items) must comply with the format adopted by the enterprise income statement (Statement of Comprehensive Income), since this correspondence will make it possible to qualitatively plan and take into account the entire process of forming the financial results of the enterprise (Table 5.7). To ensure comparability, it is convenient to use the same format. The results obtained according to the plan, or in fact, do not need to be regrouped, listed, or corrected.

Table B. 7

Scheme of formation of financial results

day off index	adjustment		result
day off index	Action ("-" - subtraction, "+" - addition)	Name of indicator	result
Operating income		Direct production costs	margin
Operating income		Direct selling expenses	margin
margin		Business overhead	Cost contribution
Coverage contribution		Enterprise overhead	Profit from operating activities
profit from basic activities		Income from financial activities	Profit before tax
		Financing expenses
		Other income
		other expenses
Profit before tax			Net profit
Net profit		Contributions to enterprise funds	Unallocated
	dividends		Unallocated

On the basis of a single format, it can be argued that the BDT - just like in the Statement of Financial Performance - involves sequential, step by step, deductions from the gross financial results (revenue, marginal income, etc.) of the relevant expense items. So, according to the results of such a deduction of expenses, financial results “cleared” from a certain part of the expenses are formed at each step. And if at the first stage marginal income is formed as the difference between total income and cost, then at the last stage we get net profit.

In some cases, it is advisable to enter additional lines "Financial result from financial activities" and "Financial result from other business operations", which will improve the management of their financial results.

Cash flow budget (CDBS) reflects the movement of funds (cash flows) for all types of bank accounts, cash desks and other places of storage of the enterprise's funds.

According to the direction, cash flows are divided into two types:

Receipts to the enterprise (cash receipts to the enterprise);

Payments by the enterprise (payments by the enterprise).

The difference between input cash flows (receipts) and output cash flows (payments) determines the net cash flow of the enterprise, which can be both positive when the enterprise accumulates temporarily free cash, and negative when cash payments exceed receipts. There is a correspondence between receipts and incomes, as well as between payments and expenses. The formation of the majority of income and expenses is associated with the receipt and payment of funds. The level of detail of the BDDS and BDR articles should be the same. An example of the correspondence between articles BDDS and BDR is presented in Table. 5.8.

Table 5.8

Correspondence of articles BDDS and BDR

This correspondence provokes an equal sign between profit and net cash flow. However, even the beginning entrepreneur is aware that there are quite significant differences between them. The main reasons that cause differences between income and receipts or between costs and payments are:

1) differences in terms. Receipts in time may lag behind incomes, or may be ahead of them, in some cases they may coincide. The same thing happens with payments. They can be carried out synchronously with expenses, they can be ahead of them, or they can lag significantly behind - sometimes quite significantly;

2) differences in amounts. There are receipts that are not income and vice versa. An enterprise may receive income and not have receipts corresponding to these incomes. In relation to expenses / payments, there is a complete analogy: an enterprise can make expenses that do not require payments, and make payments that are not expenses from an accounting point of view.

Let's take a closer look at each discrepancy.

Differences in the lines in relation to income are as follows (Table 5.9).

Table 5.9

Line discrepancy with respect to income and receipts

Determining the relationship between BDT, BGRK and the balance sheet, it can be indicated that advance receipts form the company's accounts payable, and commercial (commodity) credit provided to customers - accounts receivable.

The difference in the lines in relation to expenses and payments is as follows (Table 5.10):

Table 5.10

Payment term in relation to expenses

In the balance sheet, advance payments are presented in accounts receivable, and commodity credit received from suppliers is accounts payable.

Disagreements in the amounts in relation to income are not so diverse: income from the main activity cannot be more than income. They can only be less due to losses associated with "bad faith" receivables. Consequently, in those enterprises where products (works, services) are sold exclusively for cash, receipts coincide with income both in terms and in volume. At enterprises that receive payment for products (works, services) in advance, the volume of income and receipts are the same, but receipts are formed earlier. At the same enterprises selling products mainly on terms of commercial(commodity) credit, receipts lag behind income both in terms and in amount. Nevertheless, as competition grows, commercial (commodity) credit will expand, and this type of income will become predominant.

The financial activity of an enterprise can generate receipts of funds that are not income, but are loans, as well as receipts that are not related to income, but are investments in the authorized capital of the enterprise and sponsorship (including budgetary).

Disagreements in amounts in relation to expenses are possible in both directions: as mentioned above, there are payments that are not expenses, and expenses that do not require payments. The main articles for which the EDV and BDDS differ from each other are given in Table. 5.11

Thus, BDDS is a mandatory tool for managing the cash flows of an enterprise. It is used to plan and analyze:

Volumes of specific payments and receipts;

Timing of payments and receipts of money;

Orientation of cash flows - receipts by sources, payments for their intended purpose;

Cash turnover for the period (with the required frequency), which is necessary to assess the need for additional financing;

The balance (balance) of funds on accounts for specific (control) dates.

All of the above allows you to manage the solvency of the enterprise, that is, its ability to repay obligations in a timely manner. This is achieved through the following measures:

Maintaining the required amount of funds on the account (for making all planned payments);

Table 5.11

Disagreements in articles between BDT and BDDS

The budget is a financial document created before the proposed activities are carried out. Unlike a formalized income statement or balance sheet, the budget does not have a standardized form that must be strictly followed.

The structure of the budget depends on what is the subject of the budget, the size of the organization, the degree to which the budgeting process is integrated with the financial structure of the enterprise. The budget should present information in an accessible and clear way so that its content is understandable to the user. budget cycle includes the following steps:

Planning the activities of the enterprise as a whole and by departments.
Preparation of draft individual budgets.
Preparation of the draft general budget.
Making adjustments and coordinating budgets.
Budget approval, feedback design and changing conditions.

Budgeting is based on the general (main) budget, which is a work plan coordinated across all departments or functions for the enterprise as a whole. It consists of operational and financial budgets.

I. Operational budget.

Sales budget.
production budget.
Inventory budget.
Procurement budget (material use or direct material costs).
General production budget.
Labor budget
Business expenses budget.
Budget for general and administrative expenses.
Forecast income statement.

II. Financial budget.

Capital cost budget (investment budget).
Cash budget (cash budget).
Forecast balance.

Operational budget.

The operating budget shows the planned operations for the coming year for a segment or individual function of the company. In the process of its preparation, the projected sales and production volumes are transformed into quantitative estimates of income and expenses for each of the operating divisions of the company.

Sales budget

A sales forecast is a necessary preliminary step in the preparation of a sales budget.
The sales forecast turns into a sales budget if the company's management believes that the forecasted sales volume can be achieved.

When preparing a sales budget, it is necessary to take into account the levels of sales volume for previous periods and analyze a number of macroeconomic factors, each of which can have a significant impact on sales volume and its dependence on the profitability of products.

The reliability of the sales forecast is increased by using a combination of expert and statistical methods:

Sales budgeting:

The sales budget is an important step in creating a master budget; sales estimates affect all subsequent budgets.
The sales budget reflects the monthly or quarterly sales volume in natural and value terms.
The sales budget is compiled taking into account: the level of demand for the company's products, sales geography, customer categories, seasonal factors.
The sales budget includes the expected cash flow from sales, which will later be included in the income side of the cash flow budget.
To forecast cash receipts from sales, it is necessary to take into account the collection coefficients, which show what part of the shipped products will be paid for in the first month (month of shipment), in the second, etc., taking into account the adjustment for bad debts.

production budget.

The production budget is a plan for the production of goods in natural terms.
The production budget is based on the sales budget; it takes into account production capacity, increases or decreases in inventory (inventory budget), and external purchases.
The required volume of output is defined as the estimated stock of finished goods at the end of the period plus the volume of sales for this period and minus the stock of finished goods at the beginning of the period.

Inventory budget.

The inventory budget contains the information necessary to prepare a pro forma profit and loss statement - in terms of preparing data on production cost of products sold and the forecast balance sheet - in terms of preparing data on the state of normalized working capital(raw materials, materials and stocks of finished products) at the end of the planning period
Volume work in progress determined based on technological features product manufacturing.

Purchase budget.

The procurement budget is a plan for purchasing products from the product range by product type or by main suppliers. Shows how much and what products should be purchased by the enterprise from external (import) and internal suppliers.
The purchase budget is compiled by the purchasing department based on the sales budget, since the volume of purchases directly depends on the volume of sales. The volume of purchases of raw materials and materials depends on the expected volume of their use, as well as on the estimated level of stocks

The formula for calculating the volume of purchases is as follows:

Volume of purchases = volume of use + stocks at the end of the period - stocks at the beginning of the period

The procurement budget, as a rule, is drawn up taking into account the timing and procedure for repaying accounts payable for materials.

General production budget.

The overhead budget reflects the amount of all costs associated with the production of products, excluding the cost of direct materials and direct labor costs.
General production costs include fixed and variable parts. The permanent part is planned based on the needs of production, the variable part - as a standard, for example, from the labor costs of the main production workers
The overhead budget usually includes a number of standard cost items: depreciation and rental of production equipment, insurance, additional payments workers, payment for unproductive time, etc.

labor budget.

Direct labor costs are the costs of wages production staff
The budget for labor costs is prepared based on the production budget, labor productivity data and wage rates for key production personnel.
In the salary budget of the main production personnel, it is necessary to distinguish two components:
1. fixed part of wages
2. piecework payroll
If, by the time the budget is being prepared, a significant payable arrears have accumulated for the payment of wages, then it is necessary to provide for a schedule for its repayment.

Business expenses budget.

The budget of selling expenses takes into account all costs associated with the sale, promotion and storage of goods.
The budget of selling expenses is formed taking into account the budget of variable overhead costs, advertising budget and other fixed business expenses.
Variable selling expenses (commissions, packaging costs, warehousing, transportation of goods to customers) depend on the volume of sales and purchases and are transferred from the variable general expenses budget.
Commercial expenses are grouped according to criteria, the main of which are: types of products, categories of buyers.
When compiling the budget for commercial expenses, fixed costs are allocated to a separate group: advertising and marketing costs and the costs of storing goods in a warehouse. The amount of these expenses is planned on the basis of statistical data (expenses of the previous period, seasonally adjusted) and management decisions. For example, a decision may be made to change the location of a warehouse or the area of rented premises, to revise the amount of insurance coverage. inventory and other.

Budget for general and administrative expenses.

The budget shows all expenses not related to commercial activities enterprises, namely: office expenses, personnel expenses, lighting and heating of non-production facilities, business trips, communication services, taxes and interest on loans related to the cost price, etc.
General and administrative expenses are fixed.
The budget for general and administrative expenses is prepared on the basis of the budgets prepared by the responsibility centres.

Forecast income statement.

The pro forma profit and loss statement is the first of the main budget documents, showing how much income the company earned during the reporting period and what expenses were incurred.
Revenue information comes from the sales budget. Data on the costs required to ensure the planned sales volume are determined when calculating the cost of goods sold. Information about the costs associated with the current activities of the enterprise comes from the budget for selling expenses and the budget for general and administrative expenses.
Preparing a pro forma profit and loss statement is the last step in preparing an operating budget.

Financial budget.

The financial budget is a plan that reflects the expected sources financial resources and directions for their use in the future. The financial budget includes a capital expenditure budget, a company cash budget, and a budgetary balance sheet.

Capital expenditure budget.

The capital budget is a plan for capital expenditures, indicating sources of funding.
The capital budget includes both plans for the acquisition of fixed assets and intangible assets, as well as long-term investment projects. In the latter case, separate calculations are made investment projects in order to determine the return on investment. Projects that meet the cost-benefit criteria are included in the capital cost budget.

Cash budget.

Making a cash flow forecast is one of the most important and difficult steps in budgeting; the basis for its compilation is the sales forecast.
This is a plan for cash receipts and payments and payments for a future period of time.
In general, this budget shows the expected ending balance in the cash account at the end of the budget period.
Revenues from core activities are calculated taking into account changes in receivables, expenses - taking into account changes in accounts payable.

Forecast balance.

Shows what means of financing the company has and how these funds are used.
Characterizes the financial condition of the company on a specific date
To forecast the balance, the value of normalized current assets and the value of receivables are used.
The passive part of the balance sheet is formed based on the estimated turnover of accounts payable, other current liabilities and other sources of financing.
The discrepancy in the forecasts of the active and passive parts of the balance sheet gives an idea of the shortage (excess) of financing. The decision on the method of financing is made on the basis of additional analysis.
A change in the structure of the balance sheet affects the cash flow.

Comprehensive regulatory method of accounting as information base budget process.

The normative method is mainly used in enterprises engaged in mass production, but can also be used in medium-scale production. The actual cost here is calculated from the standard cost by taking into account changes in the norms and deviations from these norms. Accounting for deviations from the norms is organized depending on technical features raw materials and materials, regulation of their consumption and technology of the production process. The deviations from the current norms themselves are determined by comparing the actual consumption of materials for the production of products by batches with the standard consumption.

STATE COST ACCOUNTING

Standard costs per unit of product produced	Components	Definition	Influencing factors
1	2	3	4
Normative direct material costs	Standard unit price of materials	Estimated cost of a certain type of material for the next accounting period	Possible price increases, quantitative changes in the materials market, new sources of supply, etc.
	Normative amount of materials	An estimate of the expected quantity of materials that will be used to produce a unit of product	Engineering specifications of products, quality of materials, technical condition of equipment, qualifications and experience of workers
Standard direct labor costs	Standard time (labor costs) per unit of output	An estimate of the time required for each department, machine, or process to produce one unit or one batch of products	Replacement of machinery and equipment, change in the qualifications of the workforce
	Standard wage rate	Hourly labor costs expected in the next accounting period for each operation or type of work	Industry-wide regulations, management directives, contract changes
Regulatory overhead costs	Normative coefficient of variable overhead costs	Attitude total amount planned variable overhead costs to the standard value of the indicator taken as the basis for calculations (most often this is an indicator of direct wage costs, i.e. standard hours of labor costs)	Change of calculation base
	Normative coefficient of fixed overhead costs	The ratio of the total amount of planned fixed overhead costs to normal capacity in standard labor hours	Change of calculation base

Deviation management.

Total direct material cost variance = Direct material cost variance - Direct material cost variance
= (actual price - standard price) actual quantity - (actual quantity - standard quantity) standard price
= actual quantity actual price - standard quantity standard price

Total direct labor variance = Deviation in wage rate of direct labor - Deviation in productivity of direct labor
= (actual rate - standard rate) actual hours - (actual hours - standard hours) - standard wage rate
= actual hours actual pay rate - standard hours standard wage rate

Management on deviations (deviations of general production expenses).

Account Rules:

all entries on the accounts are kept according to the standards;

a separate account is allocated for each type of variance ("Direct materials price variance", "Direct materials use variance", etc.);

unfavorable deviations are reflected in the debit of these accounts, favorable - in the credit.

Example (variance analysis). The company uses an accounting system standard costs. The main product is produced in a single workshop. The standard variable costs per unit of the finished product are as follows:

$37.50

10.80

6.00

$54.30

The normal capacity is 15,000 hours of direct labor, and the planned continuous ODA for the year is $54,000. During the year, the company produced and sold 12,000 units of finished products.

The following information is known:

37,500 sq. m. were purchased and used. meters of straight materials; purchase price was $12.40 per sq. m;

Direct labor costs were 15,250 hours and the average direct labor rate was $9.20 per hour;

Actual ODA for the period was: $73,200 variable ODA and $55,000 permanent ODA.

1. Standard hours for actual release= 12,200 units 1.2 hour/unit = 14.640 hours.

2. Normative coefficient of constant ODA= $54,000: 15,000 hour = $3.60 for one hour of direct labor.

3. Price deviation of direct materials= ($12.40 - $12.50) 37,500 sq. m = $3,750 (B)

4. Deviation on the use of direct materials= (37,500 sqm - 12,200 units 3 sqm) $12.50/sqm m = $11,250 (N)

5. Direct labor rate variance= ($9.20 - $9.00) 15,250 hours = $3,050 (N)

6. Deviation in productivity of direct labor= (15,250 hours - 12,200 units 1.2 hours/unit) $9.00/hour = $5,490 (N)

Operating budgets

Operating budgets include the following.

Sales budget

shows monthly and quarterly sales volumes by types of products and for the company as a whole in natural and value terms during the budget period.

Production budget

reflects monthly and quarterly volumes of production (output) by types of products and for the company as a whole in physical terms, taking into account stocks of finished products at the beginning and at the end of the budget period.

Finished Goods Inventory Budget

contains information on stocks by types of products, for the company as a whole and for individual businesses in physical and cost terms.

The budget of stocks of goods, raw materials and materials

(main materials and stocks of inventories - inventory) includes information on stocks by types of inventory for the company as a whole and for individual businesses in natural and cost terms.

Budget of direct material costs

(main materials and stocks of inventory items) contains information on the costs of raw materials and materials, purchased products and components per unit of finished products by type of product and for the company as a whole in natural and cost indicators, as well as information on stocks of basic materials in value terms at the beginning of the budget period.

Direct labor budget

reflects the cost of wages for the main production personnel during the budget period per unit of finished products by type of product and for the company as a whole in natural and cost terms, i.e. taking into account the cost of working time in man-hours and tariff rates.

Budget of direct production (operating) costs can be compiled when more accurate accounting of production (operational - for trading firms and service sector enterprises) costs that can be categorized as direct (variable) costs.

Budget for general production (general workshop) overhead costs shows the salary costs of administrative, managerial, engineering and support staff directly employed in this business (workshop, structural unit), rent payments, utility and travel expenses, expenses for Maintenance, the cost of a low-value and wearing tool and other costs (mainly general shop expenses) associated with the operation of this business during the budget period.

Management budget

contains information on the cost of salaries of administrative, managerial, engineering and support personnel in the management apparatus of an enterprise or firm, rent payments, utility and travel expenses, maintenance costs, the cost of low-value and wearing tools and other (mainly corporate) expenses throughout the budget period.

Business expenses budget

The overhead budget contains

information about other business expenses, such as depreciation, loan interest, and other plant-wide expenses during the budget period.

The difference between the budget of general production overheads and the budgets of administrative and commercial expenses in terms of structure and set of items is insignificant, and their formats may coincide. The main difference is that in the first case, all costs can be calculated directly for separate species business (product, workshop, structural unit), and in the second - the same costs can be determined only for the company as a whole.

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What is an Operating Budget | operating budget

Operating budget — English operating budget, are carefully detailed budgets that are prepared for the purpose of managing current expenses.

They differ from other types of budgeting strategies, which may include items that take into account future operations or additional costs that will be incurred outside the core budget. The operating budget should not only guarantee the availability of funds that are necessary for the continuous functioning of the business, but also distribute them in the most efficient way.

Almost every organization designs and executes an operating budget. Regardless of the size of the company, this type of budgeting helps determine how much revenue you need to generate in order to continue operating at the same level.

Non-profit organizations also prepare an annual budget that reflects the expected amount of donations and other sources of income that will be used to cover expenses. An operating budget can even be prepared by households, as it makes it easier to determine the types and amounts of monthly expenses.

The operating budget for a business will mainly include items of expenditure that arise from month to month on an ongoing basis. For example, they will include the salaries of employees, as well as related costs for a social package, such as health insurance. The budget will also carefully plan operating costs to keep the company running at a level that allows it to make a profit. In many cases, the operating budget accounts for and schedules debt payments, including interest payments on loans.

The foundation of an operating budget is an estimate of the workload required to support the operations of the business. This is usually presented as full units of work, identified by cost items that are associated with operations. Structuring a budget based on reliable information makes it easier to create an operating budget Often, this information is important in order to solve the problem of optimal distribution of funds between various departments of the company so that they can carry out their activities efficiently.

As with any other type of budget, the operating budget may be amended or adjusted from time to time. This can be caused by factors such as changes in revenue, the launch of a new product line, the opening of new or closing of old divisions, changes in consumer demand, etc. Therefore, a certain degree of flexibility is usually included in the operating budget, which allows managers to make decisions to increase or decrease certain items of expenditure as necessary.

The types of budgets used in financial planning can be divided into four main groups:

main budgets (also called financial);

operating budgets;

supporting budgets;

special budgets.

All these budgets are needed to compile a consolidated production or main budget (master budget). In this case, the master budget can be developed both for the organization as a whole and for an individual business.

Basic budgets:

1. Essence and purpose of budgeting

1.1. Budgeting as a management technology

Budgeting in management accounting refers to the planning process. Planning is a special type of decision-making process that does not concern one event, but covers the activities of the entire enterprise. The planning process is inextricably linked with the control process. Without control, planning becomes meaningless. Planning, along with control, is one of the functions of management and is the process of determining actions to be performed in the future.

Any enterprise that has reached a medium size and, as a result, has such organizational structure, in which the services of the enterprise have a certain level of independence, needs planning and control.

Planning and control are based on the analysis of past financial and

non-financial information. Financial information necessary for planning is collected and processed in the system accounting.

The estimate (or budget) is a financial document created before the proposed activities are carried out. This is a forecast of future financial transactions. budget, being integral part management control, creates an objective basis for evaluating the performance of the organization as a whole and its divisions. In the absence of a budget, when comparing current period indicators with previous ones, one can come to erroneous conclusions, namely: past period indicators may include the results of productive work. The improvement of these indicators means that the enterprise began to work better, but it has not exhausted its capabilities. When using indicators from previous periods, opportunities that have arisen that did not exist in the past are not taken into account. The budget, as a means of coordinating the work of various departments of the organization, encourages the managers of individual links to build their activities taking into account the interests of the organization as a whole.

One of the main functions of budgeting is forecasting ( financial condition, resources, revenues and costs). This is what budgeting is valuable for adoption. management decisions. The role of the system management accounting and budgeting is to present all financial information, to show the movement of cash, financial resources, accounts and assets of the enterprise in the most convenient form for any manager, even not very knowledgeable in the intricacies of accounting, to present the relevant indicators of economic activity in the most acceptable way for making effective management decisions in the form of the supply of goods or the provision of services to a consumer who wants to buy them, is not necessarily accompanied by their payment and the shipped products are converted into sales proceeds.

The budget system performs a control function, defining the scope of responsibility of managers at various levels and correlating it with indicators of budgets and estimates. Financial control and performance evaluation are in this case the nature of direct and feedback. Comparison of budgetary and actually achieved indicators is carried out by control with feedback, and feed-forward control is based on the comparison of budgetary indicators with the goals set by the organization. Through control mechanisms with direct and feedback, a system of remuneration for managers (bonuses, benefits, etc.) is built. It should be noted, however, that for effective work budgetary control mechanisms, it is necessary that the budgeting system assumes a certain freedom of action for managerial personnel without immediate accusations and sanctions in case of short-term deviations from budget indicators. With the help of budgeting, indicators (tasks) are developed for specific groups of employees, which increases their responsibility for the results of work. In addition, the participation of employees of the organization in the preparation of budgets and estimates increases the motivational effect. However, the budget-oriented style of evaluating the work of managers is unacceptable in the face of uncertainty.

The budgeting system forms the financial awareness of the employees of the organization. They must know and clearly understand the consequences of their actions, they must think about the fact that some other, alternative solutions could be more effective in terms of finances.

Many decisions that affect the performance of the budget year are made in advance as part of the perspective plan, which should be the starting point for the preparation of the annual budget. Persons responsible for the preparation of budgets and estimates should receive information from senior management about this. In addition, they should be aware of possible changes in operating conditions, adjustments that change prices, inflation rates, industry demand and output. In the process of presenting information to the heads of the main activities responsible for the preparation of individual sections of budgets and estimates, it is necessary to give instructions on the nature of the response to possible changes in the economic situation. The communication function of budgeting is enhanced when its process is carried out in the form of a combination information flows moving in opposite directions.

When implementing the communication function of the budgeting process, it should be borne in mind that it is quite laborious and expensive, and if the costs for it are higher than its merits, it will turn into a bureaucratic brake.

The budget period (duration of the time interval covered by the budget) for strategic budgeting is from 3 to 10 years, for operational budgeting - 1 year.

The goals and objectives of budgeting depend on the mission of the organization, its main and private goals. This should:

● clearly formulate the main financial and non-financial goals;

● select indicators that can be used to monitor the achievement of these goals;

● define the tasks (ensuring the achievement of the main goals) that can be solved with the help of budgeting.

● The main objectives of budgeting are formed as follows:

● performing the functions of a planning tool;

● control with direct and feedback;

● providing a motivating influence on the activities of employees;

● formation of a communication environment;

● ensuring the coordination of the organization's activities.

1.2. Types of budgets

The components of intra-company budgeting are:

a) technology (management);

b) organization of the budgeting system;

c) automation.

When setting up intra-company budgeting, it is necessary to follow its basic principles:

● use of budgeting methodology based on Western principles financial management adapted to Russian conditions;

● creation of corporate databases based on the collection and processing primary documentation, including all the information of the financial statements (and apart from it) in a more operational mode than the timing of the reporting;

● strict adherence to the principles of confidentiality.

The tool of the budgeting process are budgets (plans, estimates). They can be divided into four main groups:

● basic budgets (income and expenditure budget, cash flow budget, balance sheet);

● operating budgets (sales budget, production budget, budget of direct material costs, direct labor costs, etc.);

● support budgets (capital investment plan, credit plan, tax budgets);

● additional (special) budgets (profit distribution budget, plans for individual projects and programs).

All these types of budgets are necessary for making a forecast of the financial condition of the enterprise and for conducting a plan-fact analysis .

Budgeting, as a rule, begins with the development of operating budgets, among which it is usually customary to highlight the following:

1. Sales budget.

The sales budget shows the monthly and quarterly sales volume by type of product and by the organization as a whole in physical and cost terms. It provides a forecast of total income against which cash receipts from consumers will be measured. Sales volume is the basis of other budgets (estimates).

2. Production budget (production program);

The production budget is formed monthly and quarterly only in quantitative terms and is the responsibility of the production manager. Its task is to ensure the volume of production sufficient to meet customer demand and create an economically viable level of stocks.

3. Budget for stocks of finished products.

The budget of stocks of finished products contains information on stocks by type of product, for the organization as a whole and for individual businesses within it in physical and cost terms. It can be combined with the production budget, be part of it.

The budget for stocks of finished goods is calculated at the beginning and at the end of the budget period. At the beginning of the period, the amount of reserves is set based on the expected balances at the end of the current (reporting) year and includes:

- actual or expected balances of finished products in the warehouse;

- products shipped, for which the payment deadline has not come;

– products not paid for by the buyers on time;

- products that are in the custody of buyers.

4. The budget of direct material costs.

The budget of direct material costs generates information on the costs for the procurement and acquisition of inventory items necessary for the manufacture of products, per unit of production and in general for the organization in natural and cost terms.

It also contains information on stocks of basic materials in value terms at the beginning and end of the budget period.

Operating budget and its composition.

Operating budget- this is a system of budgets that characterize the costs of production, sales of products, enterprise management, as well as the costs of individual stages of production and enterprise management functions.

It includes:

1) sales budget;

2) production budget;

3) the budget of direct costs of raw materials and materials;

4) the budget of direct labor costs;

5) variable overhead budget;

6) the budget of stocks of raw materials, finished products;

7) budget for administrative and commercial expenses;

8) the budget for the cost of goods sold.

Operating budgets are necessary for the formation of natural and cost targets used to draw up the main budgets.

The purpose of operating budgets is to plan current activities. There are the following types of operating budgets.

1. Sales budget. Depending on the production capacity, goals set for the future, sales markets, the planned sales volume is calculated based on the forecasted production quantity and planned prices. Calculations are made by types of products. Drawing up this type of budget is mandatory for all enterprises. Forms it on various enterprises may differ from each other depending on the specifics.

2. Production budget. The planned production volume is calculated. The basis is the sales budget and the balance of finished products. The calculation of this type of budget is necessary for the formation of the production program.

3. The budget of direct costs of materials and raw materials. It is calculated on the basis of material consumption rates per unit of output, forecast data for the budget for the production of raw materials and materials leftovers in warehouses, and market prices. In this budget, the volume of purchases of material and technical resources is formed. Data is generated both in monetary and in-kind terms. This type of budget is typical for manufacturing and construction enterprises.

4. The budget of direct labor costs. The total cost of attracting labor resources is calculated. Initial data: production budget.

The system of labor rationing is used.

5. Variable overhead budget. The calculation is based on overheads broken down by items: depreciation, electricity, insurance costs, etc.

6. The budget of stocks of raw materials, finished products. It is calculated on the basis of data on the balance of raw materials and materials in natural units, stocks of finished products, prices and cost. In organizations with a long production cycle, a work in progress budget may be prepared along with or instead of an inventory budget. AT construction organizations by analogy, a construction-in-progress budget can also be drawn up.

7. Budget for management and commercial expenses. Here the predictive estimate is calculated fixed costs. The composition of the articles depends on many factors, including the specifics of the enterprise.

8. The budget of the cost of goods sold. It is calculated on the basis of previous operating budgets based on the costing methodology approved by the enterprise.

Financial budget and its composition.

The financial budget is a plan that reflects the expected sources of funds and directions for their use in the future period.
Financial budget (financial budget) is used to analyze the financial conditions of the unit by analyzing the ratio of assets and liabilities, cash flow, working capital, profitability.
An important component of the main (consolidated) budget of the organization is financial budget(plan). In the most general view it represents the balance of income and expenses of the organization. In it, quantitative estimates of income and expenses given in the operating budget are transformed into monetary ones. Its main purpose is to reflect the expected sources of funds and directions for their use.

With the help of the financial budget (plan), you can obtain information on such indicators as:

Sales volume and total profit;

Cost of sales;

Percentage of income and expenses;

Total investment;

Use of own and borrowed funds;

Payback period of investments, etc.

The financial budget includes investment and cash budgets, as well as a forecast balance sheet (statement of financial position).

Ticket number 14

Relationships between operating and financial budgets from the perspective of reflecting business processes. 2. Interrelationships between the operating and financial budgets from the standpoint of the completeness of the information necessary for calculating budgets.

The budgeting system of any enterprise is a set of interrelated operating, investment and financial budgets. The operating budget consists of the budgets of sales, production, purchases, etc., the investment budget - from the budgets of capital investments, the sale of non-current assets, and investment receipts. The financial budget usually includes a cash flow budget, a profit and loss budget (budget of income and expenses) and a forecast balance. The master budget, which includes the financial, operating and investment budgets, is often referred to as the master budget.

When developing a budgeting system, one should take into account not only the types of budgets drawn up, but also the relationship between them, as well as the sequence of their formation. The totality of all budgets and the procedure for their preparation is usually called the budget model.

Typically, the budgeting process begins with a sales budget. Based on this budget, the production program of the enterprise is determined, as well as the need for production facilities, personnel, raw materials and materials, the costs of maintaining service units are calculated. At the next stage, the budget for the cost of production, the procurement budget and other budgets that are part of the operating budget are formed. Based on the operating budget data, a financial budget is created.

Ticket number 15

Core budget models.

The main budget (master budget) summarizes the goals of all departments of the organization responsible for sales, production, R&D, marketing, customer service, finance.

Budgeting is based on the general (main) budget, which is a work plan coordinated across all departments or functions for the enterprise as a whole. It consists of operational and financial budgets.

The master budget is the financial, quantified expression of the marketing and production plans needed to achieve goals.

The core budget consists of three mandatory financial documents:

· Profit and loss statement forecast

・Forecast cash flow statement

· Forecast balance sheet

The budgeting process can be conditionally divided into two parts:

The operating budget consists of:

Implementation budget

production budget

Inventory budget

Budget for direct material costs

The budget for overhead costs

Budget for direct labor costs

・Business budget

· General expenses budget

Profit and loss budget

The financial budget is a plan that reflects the expected sources of funds and directions for their use.

The financial budget consists of:

· Investment budget

・Cash flow plan

Forecast balance

The planning process should begin with a sales plan.

The remaining plans should be built on the basis of this plan and taking into account the achievement of the planned strategic indicators.

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§ 2. Financial planning and financial
control

The basis of financial management is financial planning.

Its main objects are the formation, regulation of the composition and structure and distribution of financial resources.

The principles of financial planning are:

choice of directions for investing funds that provide extremely high profitability;
payback period accounting;
using the most economical ways to finance long-term costs;
ensuring the balance of risks, taking into account inflationary processes.

Financial planning is current and prospective.

promising is a way to implement financial strategy and ensures the optimization of sales, cost, profit, profitability, financial stability, solvency. It is specified in annual financial plans(budgets), linking investments and sources of their financing.

The general planned budget consists of a forecast income statement, a forecast balance, a cash budget and is divided into operating and financial.

The composition of the operating budget includes: the budget for the costs of production, sales, the budget for inventories, the budget for general administrative expenses; forecast income statement.

The production cost budget reflects the volume of production and changes in inventories.

The sales budget determines the amount of money that the firm can receive from customers.

The inventory budget determines inventory requirements and serves as the basis for purchasing planning.

The financial budget consists of a cash budget and a forecast balance.

Main tools current financial planning are: the annual balance of income and expenses, estimates of the formation and use of cash funds, wages, funds allocated for the development and improvement of core activities, reserve and social funds.

The balance of income and expenses has the following structure:

1) income and receipts of funds (includes all financial results, except for those received from banks and the state from budgetary and non-budgetary funds);
2) expenses and deductions of funds (reflects the use of financial results for expanded reproduction, incentives, organizational and other expenses, such as charity, the purchase of securities);
3) credit relationships with banking institutions (obtaining and repaying loans, paying interest). The section consists of revenue and expenditure parts;
4) relationships with the budget and off-budget funds. The section also consists of revenue and expenditure parts. It reflects tax payments to the budget, off-budget funds and allocations from them.

The third and fourth sections are balancing. The excess of payments to the budget and extra-budgetary funds over appropriations should be equal to the difference between income (section 1) and expenditures (section 2) FROM taking into account the balance of credit relationships.

The balance of income and expenses allows you to:

to identify the possible financial consequences of the decisions taken;
check the correctness of the calculations;
calculate financial ratios;
determine the desired volume of sales of products and services.

To facilitate the work, an auxiliary "chessboard" to the annual plan can be drawn up, in which the directions for the use of financial resources are given vertically, and their sources horizontally. It allows you to balance income and expenses by items, determine reserves, and form cash funds.

In addition to the balance of income and expenses, enterprises also draw up a balance of payments.

The structure of the balance of payments is as follows.

1. Income and receipts.

1.1. Balance of funds at the beginning of the period.
1.2. Receipt of funds during the period: from the sale of products and services;

from the sale of material assets and material resources;
advance receipts, including prepayment;
planned non-operating receipts;
rent;
income from leasing;
receipts on bills;
accounts receivable;
financial aid;
proceeds from securities;
proceeds from the sale of foreign currency;
borrowed funds;
budget resources;
other supply.

2. Expenses and deductions.

2.1. Priority payments for urgent needs.
2.2. Tax payments to the budget system.

2.3. Deductions for social insurance and off-budget funds.
2.4. Payments at the discretion of the enterprise: labor costs;

labor costs;
payment for the supply of materials, works, services, including advances, prepayments, rent, business trips, business expenses, repayment of loans, loans and interest, payment of promissory notes, payments to contractors, other payments.

Total expenses.
Excess of receipts over expenditures and payments.
Excess of expenses and payments over receipts.
The balance of cash resources at the end of the period.

Operational financial planning is to create and execute payment calendar- a financial document reflecting the receipt and use of funds. With its help, a complete picture of the state and use of the financial resources of the enterprise, payments and settlements is created, budgeting, production and sale of products, etc. are controlled.

The payment calendar provides prompt financing, fulfillment of settlement and payment obligations, allows you to track the state of your own funds and, if necessary, attract bank and commercial loans.

Financial planning is complemented financial control, whose objects are:

the correctness and timeliness of the transfer of funds to the funds of enterprises for all established sources of financing;
observance of the given income structure, taking into account the needs of production and social development;
expediency and efficiency of use of financial resources;
making payments and settlements;
the state of financial indicators.

Financial control is based on the norms for the size of funds of funds and sources of their formation, estimates of cash income and expenses, etc. The main methods of its implementation include:

1) checking on certain issues of financial activity on the basis of reporting, balance sheet and expenditure documents;
2) analysis based on periodic or annual reporting in order to identify the state financial discipline, plan execution level;
3) a survey that differs from verification in a wider range of issues;
4) audit - verification of financial and economic activities for the reporting period. Audits can be full and partial, thematic and comprehensive, scheduled and unscheduled, selective and continuous, documentary and actual, have cash or material values. Based on the results of the audits, an act is drawn up.