BU247 Lecture Notes - Lecture 7: Cash Flow Statement, Cash Flow, Income Statement
Document Summary
Bu247 lecture 7 using budgets for planning and coordination. Session 16 (the master budget and financial modelling) Budgeting process = determines the planned level of variable costs. Production plan = planners match the completed sales plan with the organizations inventory policy and capacity level to determine a production plan. This production plan identifies the required production in each of the interim periods making up the annual budget period. Inventory policy and sales plan are used to create the production plan. Three factors drive planning: (1) sales demand, which is the quantity customers are willing to buy at the stated price (2) the capacity levels chosen (3) production output quantity. Production capacity = minimum (shop capacity, painting capacity, supplies capacity) total demand = End goal: determine the net cash flow of each month: create cash inflow section (collections from: jan, feb, march, etc.
