Tribhuvan University
Faculty of Management
Office of the Dean
Bachelor of Business Administration (BBA)
Course Objective
:This course aims to provide the budgeting systems and their applications, practical and conceptual issues of general budgeting and profit planning position and performance appraisal of business enterprises including financial institutions. It also aims to provide important information to the managers for budgeting purpose and how the organizations areable to generate profit and reduction of costs.
Course Description
:This course contains conceptual and theoretical foundation of budgeting: profit planning and control. It also comprises the functional budgets i.e. sales plan, production plan, purchase plan, overhead budget, labour cost budget, cost volume profit analysis, zero based budgeting and flexible budgeting under different levels of activities.
Course Contents:
Lecture hours show the approximate classroom time allocated to each unit.
Unit 1.Conceptual Foundation
Concept and purpose of budgeting and profit planning and control, essentials of profit planning, Profit planning and control process, Behavioral implications of a PPC program, Application of profit planning and control in manufacturing and non-manufacturing organizations.
Unit 2.Planning and Control of Sales
Concept and purpose of sales planning, Factors consideration in sales planning, Sales budgeting vs. sales forecasting, Long range and short range sales plan, Development of comprehensive sales plan, Components of comprehensive sales plan, Planning sales in a non-manufacturing and manufacturing company.
Unit 3.Production Planning and Control of Manufacturing Concern
Concept and purpose of production planning, Area of production planning, Responsibility for production planning, Factors consideration in production planning, Production budget, Production policies, Computation of inventory. Unit :Planning and Control of Materials Purchase & Usage 4 LHs Concept and purposes, Raw material consumption budget, Raw materials purchase budget, Material control, Essentials of material control, Material inventory policy, Performancereport
Unit 5.Planning and Control of Non-Manufacturing Organization
Concept and purpose, Merchandise budget, Planning inventory levels, Mark-ups and cost multipliers used in retail companies, Open-to-buy planning.
Unit 6.Planning and Control of Direct Labour
Meaning and objectives, Process of direct labour planning, Sources of standard labour hour, Direct labour cost budget, Control of direct labour cost, Performance report.
Unit 7.Planning and Controlling Overhead Cost
Meaning and types of costs, Cost behaviors, Controllable and non-controllable expenses, Cost reduction and cost control, Planning and controlling of manufacturing expenses, Planning of distribution (selling) expenses, Planning administrative expenses, Preparation of overhead cost budget.
Unit 8.Planning and Control of Cash
Concept and objectives of cash planning, Approaches to develop cash budgeting/planning, Techniques and methods for improving cash position, Control of cash positions.
Unit 9.Completion of Profit Plan
Concept, Planned cost of goods manufactured, Planned cost of goods sold, Planned cash collection and disbursement, Planned Income Statement, Planned Balance Sheet, Zero base budgeting: Meaning and importance of Zero base budgeting (ZBB
Unit 10.Use of Cost Volume Profit Analysis in Profit Planning
Concept and objectives of cost volume profit analysis; Concept, application and assumptions break even analysis, Special problems in cost volume profit analysis, Economic characteristic of breakeven analysis, Calculation of BEP of single and multiple products.
Suggested Readings:
Welsch, G. A., Ronald, W, H., & Paul, N. G., (2013), Budgeting: Profit Planning and Control, New Delhi: Prentice Hall of India. Horngren, C. S., Sundem. G. L., Stratton, W.O., Burgstahler &Schatzberg, J., (2019). Introduction to Management Accounting, New Delhi: Pearson. Garrison, R. H., Brewer, P. C., &Noreen, E. W. (2017). Managerial Accounting, McGraw-Hill Companies, Inc.