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UNC-Chapel Hill BUSI 101 - Chapter 9 - Budgeting

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BUSI 101 1st Edition Lecture 23Outline of Last Lecture I. Page 189 in the Coursepacka. Chapter 7 practice exam problemsII. Introduction to Chapter 8a. Pricingb. Transfer PricingIII. Chapter 8 Managerial Accounting Textbook ProblemsOutline of Current Lecture I. Page 186 in Coursepacka. Chapter 8 Exam Practice ProblemsII. Chapter 9 – budgetinga. Useful equationsIII. Budgeting Problems in the CoursepackCurrent LecturePage 186 problems 23-27 is the extent of the Chapter 8 material that will be covered on the final exam23. B, best transfer price=the market price24. MP:140, VC:60, FC: 20These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.At Full Capacity – TP=VC+OC TP=60+80140-60=80 TP=14025. with excess capacity, min. TP=VC26. DM+DL+VOHD 20FOHD 15VS+A 4FS+A 6ROI 7.50TP 52.5020+15=35(52.50-35)/35=50%27. DM+DL+VOHD 20FOHD 10VS+A 5FS+A 12ROI 8TP 45.0020+5=25(45-25)/25=80%Chapter 9 – Budgeting“a budget is a plan of expectations”participating approach vs. consultative approach vs. authoritative approach**Sales drives the master budget, you need sales before you can determine a budget, sales determines production, production determines usage, usage determines purchases, purchases determines payments+depreciation IS NOT cashCommon Equations used for Budgeting Problemsbeg. Items+additional items=items available-items going out=end itemsbeg. A/P+purchases on account=available A/P-payments on account=ending A/Pbeg. A/R+credit sales=available A/R-collections=end A/Rpage 138 in Coursepack1A)Widgets X (5) Y (2)Beg. INV 20,000+produced 210,000=avail. INV 230,000-Sold 200,000=end INV. 30,000Beg. Inv. 90,000+purchases 1,010,000=available 1,150,000-used 1,050,000=end INV. 100,000Beg. Inv. 35,000+purchases 405,000=available 440,000-used 420,000=end INV. 20,0001B)ABeg. INV +produced 20,000=avail. INV-Sold Beg. Inv. 50,000+purchases 70,000=available 120,000-used 100,000=end INV. =end INV. 200,00050,000x60% = 30,000(reducing by 60% ifs the same thing as reducing it 40%)2A) $ %Sales $500,000 100%-CGS $400,000 80%=GP 20%b)beg. A/R 0+credit sales 500,000=available A/R 500,000-collections 450,000=end A/R 50,000a)beg. INV. 20,000+purchases 380,000=items available 400,000-sold 400,000=end INV. 0beg. A/P 0+purchases 380,000=available A/P 380,000-payments 350,000=ending A/P 30,000Optional Way:Cash 450,000A/R (a) 50,000Sales (r) 500,000CGS(e) 400,000A/P(l) 30,000Inv. (a) 20,000Cash (a) 350,0002B)Cash 510,000A/R (a) 10,000Sales (r) 500,0002C) $ %Sales 500,000 100%-CGS 450,000 90%=GP 50,000 10%CGS(e) 450,000INV (a) 50,000A/P (l) 100,000Cash 400,0003. beg. Cash 10,000+cash receipts 130,000=available 140,000-cash dispersements 120,000=end cash 20,000page 140 – do the first two questions for next class3. DIFFICULT PROBLEMJanuary February MarchNov. Sales (400,000) 15%Dec. Sales (600,000) 25% 15%Jan. Sales (500,000) 60% 25% 15%Feb. Sales (450,000) 60% 25%March Sales (700,000) 60%$510,000 $485,000 $607,000A/R @ 1/31 290,000=.15(600,000)+.40(500,000)A/R @ 2/29 255,000=.15(500,000)+.40(450,000)A/R@ 3/31


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UNC-Chapel Hill BUSI 101 - Chapter 9 - Budgeting

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