Modern Budgeting for Profit Planning & Control Course Description The course is intended for business professionals engaged in budgeting, financial planning, forecasting, profit planning, and control. A budget is the formal expression of plans, goals, and objectives of management that covers all aspects of operations for a designated time period. The budget is a tool providing targets and direction. Budgets provide control over the immediate environment, help to master the financial aspects of the job and department, and solve problems before they occur. Budgets focus on the importance of evaluating alternative actions before decisions are actually implemented. This course explains what budgets are, how they work, how to prepare and present them, and how to analyze budget figures and results. The new development and use of budgets such as rolling budgets at various managerial levels within a business are illustrated, as well as active financial planning software and e-budgeting that combine budgeting, forecasting analytics, business intelligence, and collaboration. Completion Deadline & Exam: This course, including the examination, must be completed within one year of the date of purchase. In addition, unless otherwise indicated, no correct or incorrect feedback for any exam question will be provided. Course Level: Overview. This program is appropriate for professionals at all organizational levels. CPE Credits: 12 (CPA) Category: Finance Prerequisite: None Advanced Preparation: None Course Learning Objectives Chapter 1: The What and Why of Budgeting 1. Define what a budget is 2. List and define the types of budgets 3. Explain the steps involved in the budgetary process 4. Distinguish between the bottom-up and top-down approaches to budgeting
5. Describe how to coordinate departmental budget activities 6. Explain actual costs versus budget costs 7. Identify the advantages and disadvantages of budgets Chapter 2: Strategic Planning and Budgeting 1. Define what is meant by budgeting 2. Explain how strategic planning and budgeting are linked together 3. Prepare a checklist for a budgeting system 4. Distinguish between short-term and long-term plans 5. List the types of plans and explain each. Chapter 3: Profit Planning: Targeting and Reaching Achievable Goals 1. Define profit planning 2. Explain the basic principles of profit planning 3. Identify the objectives of profit planning 4. Describe the role of managers in achieving profit targets 5. Give a few real-life illustrations of profit planning Chapter 4: Administering the Budget: Reports, Analyses, and Evaluations 1. List the three major types of reports and explain each 2. Identify basic types of budget reports 3. Give a list of items in the performance-to-budget report 4. Explain the budget manual and what it contains 5. Describe what the budget sheet is all about 6. Demonstrate the budget preparation calendar Chapter 5: Cost Behavior: Emphasis on Flexible Budgets and Contribution Margin 1. Define and give examples of variable costs, fixed costs, and mixed costs 2. Explain two methods of developing a flexible budget formula: the high-low method and regression analysis
3. Explain the advantages and disadvantages of the high-low method for developing a flexible budget formula 4. Develop the formula using the high-low method 5. Describe the advantages of regression analysis 6. Utilize a spreadsheet program such as MS Excel to develop the flexible budget formula. 7. Prepare a flexible budget 8. Distinguish between the terms gross margin and contribution margin 9. Explain why the contribution income statement is useful for managers Chapter 6: Responsibility Accounting and Reporting to Management 1. Define responsibility accounting and appreciate how important it is for managerial control 2. Distinguish among three types of responsibility centers and see how they are evaluated 3. Explain what cost control involves 4. Identify the types of reports necessary for effective responsibility accounting 5. Compare conventional accounting and responsibility accounting Chapter 7: Master Budget: Genesis of Forecasting and Profit Planning 1. Define master budgeting. 2. Diagram and explain the master budget interrelationships. 3. Describe the master budget process and the steps involved in the process 4. Prepare sales, production, manufacturing costs, and cash budgets. 5. Develop a budgeted income statement. 6. Prepare a cash budget 7. Explain how budgets aid in planning and control Chapter 8: Using Variance Analysis to Evaluate Performance 1. Define the standard and the standard costs 2. Identify the types of standards 3. State the purposes for using standard costs 4. Describe the steps involved in variance analysis 5. Calculate sales variances 6. Calculate the different types of variances for manufacturing costs--direct materials, direct labor, and manufacturing overhead. 7. Explain the managerial significance of these variances.
8. Computer variances in selling and administrative expenses 9. Identify the types of performance reports 10. Prepare a flexible budget and explain its advantage over the static budget format. Chapter 9: Budgeting Sales and Sales Forecasts 1. Describe how important the sales budget is 2. Differentiate between sales planning sale forecast 3. Explain how important sales forecasts are to budgeting 4.. Explain why sales forecasts are needed for managerial planning 5. List three ways of making estimates 6. Describe how regression analysis can be used to develop a sales forecasting model 7. Prepare the sales budget Chapter 10: Budgeting Manufacturing Costs 1. Explain how the production budget leads to manufacturing costs budgets 2. Prepare a direct material usage and purchase budget 3. Discuss the procedures for developing material budgets. 4. Prepare a direct labor budget 5. Discuss the procedures for developing direct labor budgets. 6. Prepare a factory overhead budget 7. Describe how the flexible budget formula help develop the factory overhead budget Chapter 11: Budgeting for Sales, Advertising, and Distribution Expenses 1. Outline the structure of a sales division 2. Prepare marketing budgets and selling expenses budgets 3. Discuss the procedures for developing selling expenses budgets 4. List three popular methods for developing advertising budgets and explain each 5. Identify some measures of advertising effectiveness 6. Prepare performance reports for marketing personnel 7. Prepare a budget for distribution expenses Chapter 12: Budgeting General and Administrative Expenses
1. Give examples of administrative expenses 2. Describe the budget process for general and administrative expenses 3. Explain some approaches to budgeting general and administrative expenses Chapter 13: Budgeting for Research and Development Costs 1. List direct and indirect costs associated with R&D projects 2. Identify the factors that need to be considered in R&D planning 3. Define the product life cycle and explain its implication in R&D planning 4. Prepare a R&D budget 5. Prepare project status reports Chapter 14: Cash Flow Forecasting and Cash Budgeting 1. Explain account analysis for estimating collection percentages. 2. Prepare a cash budget 3. Enumerate the major components of a cash budget 4. Prepare a cash variance report 5. Give some popular cash budgeting software Chapter 15: Use of a Spreadsheet Program and Software for Budgeting 1. Show how to use spreadsheet software to develop a budget 2. Give some examples of stand-alone budgeting software 3. Describe some advantages of using budgeting software 4. Briefly explain some popular budgeting software Chapter 16: Budgeting for Capital Expenditures 1. Give some examples of capital expenditures. 2. Describe why capital expenditures decisions are necessary. 3. Discuss what information is needed to make a capital budgeting decision. 4. List factors to consider in determining capital expenditures. 5. Identify the four steps in the capital expenditure budgetary process. 6. List some major forms for capital project decisions and explain each. 7. Prepare a capital budget.
Chapter 17: Zero-Base Budgeting: Priority Budgeting for Best Resource Allocation 1. Define zero-base budgeting. 2. Discuss the advantages and disadvantages of ZBB. 3. Explain how ZBB differs from traditional budgeting. 4. Describe the steps involved in the ZBB process. 5. Define decision packages. 6. Prepare a zero-base budget. Chapter 18: Budgeting for Service Businesses 1. Describe the special features associated with budgeting for service businesses. 2. Discuss a common pattern observed while implementing a budgetary system for growing service companies 3. Prepare a budget for service businesses such as a hotel and an airliner Chapter 19: Budgeting for Non-Profit Organizations 1. Identify the main features of nonprofit organizations (NPOs) 2. List the three major types of NPOs 3. Define funds. 4. Explain the concept of encumbrances. 5. Explain why budgeting is particularly important to NPOs 6. Discuss the characteristics that are unique to budgeting for hospitals, colleges, churches, and professional associations.