Budgeting, Planning & Cost Control

We invite you and your colleagues in your company to attend this training program. Do not hesitate to contact us for more information.

3 DAY PROGRAM

Sheraton Hotel-Bandung , April 29 - May 1 , 2009

By: Dr. Wiwiek M.Daryanto, SE-Ak, MM, CMA

Introduction

Firms are established to manufacture products or to render services to meet consumers’ needs. They do these by utilizing resources (labor, materials, various services, buildings, and equipment). These resources need to be financed, or paid for. To work effectively, the people in a firm need information about the amounts of these resources, the means of financing them, and the results achieved through using them.

Budgeting is the process of planning the activities of the organization’s responsibility centers for the next period, usually the next year. Budget is a plan expressed in quantitative (monetary) terms covering a specified period of time, usually one year. Many companies refer to their annual budget as a profit plan, since it shows the planned activities that the company expects to undertake in its responsibility centers in order to obtain its profit goal. The budget serves as:

- An aid in making and coordinating short-range plans.

- A device for communicating these plans to the various responsibility center managers.

- A way of motivating managers to achieve their responsibility centers’ goals.

- A benchmark for controlling ongoing activities.

- A basis for evaluating the performance of responsibility centers and their managers.

- A means of educating managers.

Management control’s purpose is to attain desired results. A budget is a statement of the results desired as of the time the budget was prepared. A carefully prepared budget is the best possible standard against which to compare actual performance. This is because it incorporate the estimated effect of all variables that were foreseen when the budget was being prepared.

A comparison of actual performance with budgeted performance provides a “red flag”; it directs attention to areas where action may be needed. An analysis of the variance between actual and budgeted results may (1) help identify a problem area that needs attention, (2) reveal an exploitable opportunity not predicted in the budgeting process, or (3) reveal that the original budget was unrealistic in some way.

Objectives

- Understand the principles types of planning activities that are part of the management control process. Understand how to develop two main types of plans: (1) strategic (or long-range) plans, and (2) budgets, which are usually annual plans structured by responsibility centers.

- Learn how to evaluate company’s performance by using budget as a tool for controlling.

Benefits

Understand the budget’s purposes as a device for making and coordinating plans, for communicating these plans to those responsible for carrying them out, for motivating managers at all levels, as a benchmark for controlling ongoing activities, as a standard with which actual performance subsequently can be compared, and as a means of educating managers.

Who Should Attend

- Managers and supervisors in all areas.

Outline

Budgeting

- Uses of the Budget

- The Master Budget

The Operating Budget

- Project Budgets

- Flexible (Variable) Budgets

- Management by Objectives

Preparing the Operating Budget

- Organization for Budget Preparation

- Budget Timetable

- Setting Planning Guidelines

Preparing the Sales Budget

- Initial Preparation of Other Budget Components

- Negotiation

- Coordination and Review

- Final Approval and Distribution

- Revisions

The Cash Budget

Longer-Run Decisions: The Capital Expenditure Budget

- Nature of the problem

- General approach

- Return on Investment

Estimating the Variables

- Required Rate of Return

- Economic Life

- Cash Inflows

- Depreciation

- Investment

- Terminal Value

- Non monetary Considerations

- Summary of the Analytical Process

- Other Methods of Analysis

- Internal Rate of Return Method

- Payback Method

- Unadjusted Return on Investment Method

- Multiple Decision Criteria

- Costs of Capital

Reporting and Evaluation

- Control Reports

- Incentive Compensation

- Standard Cost, Variable Costing Systems, Quality Costs, and Joint Costs

- Production Cost Variances

- Analyzing Other Variances

Short-Run Alternative Choice Decisions

- The Differential Concept

- Cost Constructions for Various Purposes

- Classifications of Costs

- Differential Costs and Revenues

- Contrast with Full Costs

- Contribution Analysis

- Types of Costs

- Alternative Choice Problems

- Differential Costs

- Types of Alternative Choice

Your Course Leader

Dr.Wiwiek M.Daryanto, SE-Ak,MM,CMA

is an expert in accounting and finance. She earned a degree in accounting from the University of Gadjah Mada, a Master of Management (MM) from the University of the Philippines (UP) and a Doctoral degree from Institut Pertanian Bogor (IPB). She is also a member of Certified Management Accountant of the Institute of Certified Management accountant (ACMA) Australia.

COURSE FEE : Rp. 5.000.000,- per Participant

Contact us for more information: Our Address:

Phone : 021- 8661-3585 Jl. Utama V/18, Pondok Bambu

FAX : 021- 861-6982 J a k a r t a 13430

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