Welcome to

our
presentation
Submitted for:
Professor Dr. Prashanta Kumar
Course instructor:
Department of Masters of Business Administration
East West University.

Submitted by:
Eliza Sarwar Bini 2018-1-95-047
Md. Asif Khan 2017-2-95-060
Md. Forhad Alam 2018-1-95-060
Mirza Galib 2017-3-95-017
Nazmus Salekin Shehabee 2018-1-95-055
Md. Assaduzzaman 2017-3-95-022

Sec- 1
Sub-MBA 508
 Mathematics conversation of a plan.
Or
Budgeting involves a lot of time & effort and the results of
the budgeting process should not be shoved into a filing
cabinet and forgotten.
Or
An estimate of income and expenditure for a set period of
time
 Government Budget Company Budget

Revenue Budget Planning Budget

Capital Budget Flexible Budget

Actual Cost

To be Useful Budget should provide guidance in conducting

actual operations & should be part of the performance evaluation
process
REVENUE Budget refers that
“To cover the day to day
budget.”
or
REVENUE Budget refers that
“The amount of money
allocated to the maintenance
and growth of a business.”

Capital Budget refers that

“Government Plan”-Big Plan to make
an express highway.”

Or
Capital Budget refers that “A budget
allocating money for the acquisition
or maintenance of fixed assets such
as land, buildings, and equipment.”
Planning Budget refersthat
“Prepared before the period begins
& is valid for only the planned level
of activity”
It also refers Budgeted cost for the
budgeted Activity.

Why do companies need PLANNING

BUDGET?
1. Structured planning can make all the
difference to the growth of your business

2. It will enable you to concentrate resources

on improving profits, reducing costs and
increasing returns on investment.
The planning Budget for ……………… appears below;

XYZ Fish House

Planning Budget
For the month of Ended……..
Budgeted meals served(q)…………………………….. 1,800

Revenue($16.50q)…………………………………………. 29,700

Expense:
cost of ingredients($6.25q)………………………. 11,250
wages & salaries($10,400)………………………. 10,400
utilities($800+$0.20q)……………………………… 1,160 Subtract
rent($2200)…………………………………………… 2,200
miscellaneous($600+$0.80q)…………………… 2,040

Total Expense…………………………………………….. 27,050

Net Operating Income…………………………………. 2,650

 All values are hypothetical.

 Flexible Budget refers
that “An estimate of what
revenues & costs should have
been given the actual level of
activity for the period.
It also refers Budgeted cost for
the Actual Activity

1. The supply & cost of raw materials, electricity

& natural gas may change unexpectedly
2. The market demand for steel products may
change.
3. Competitive pressures from imports &
substitute materials may intensity.
4. Uncertainties regarding the global economy
may affect customer demand.
5. New government regulations could
significantly increase environmental
compliance cost.
The Flexible Budget for ……………… appears below;
XYZ Fish House
Flexible Budget
For the month of Ended……..
Actual meals served(q)…………………………….. 1,700

Revenue($16.50q)…………………………………… 29,700 $28,050

Expense:
Cost of ingredients($6.25q)………………………. 11,250 10,625
Wages & salaries($10,400)………………………. 10,400 10,400
Utilities($800+$0.20q)……………………………… Subtract
1,160 1,140
Rent($2200)…………………………………………… 2,200 2,200
Miscellaneous($600+$0.80q)…………………… 2,040 1,960
Total Expense…………………………………………….. 27,050 $ 26,325

Net Operating Income…………………………………. 2,650 $1,725

 All values are hypothetical.

Actual Cost refers that
“compared to what the costs
should have been for the actual
level of activity during the period
rather than to the static planning
budget.
Activity Variance refers that “
Difference between Planning budget &
Flexible budget
or
Activity Variance refers that
“The difference between a revenue or
cost items in the static planning and
the same items in the flexible budget.

Revenue & Spending

Variance refers that “ Difference
between Flexible Budget & Actual Budget.”
Or
Revenue & Spending
Variance refers that “ The
difference between how much the revenue
& cost should have been given the actual
level of activity and the actual revenue &
cost for the period
A favorable( unfavorable)
Revenue variance occurs =
The revenue is higher (lower)
than expected, given the actual
level of activity for the period.

A favorable( unfavorable)
Spending variance occurs =
The cost is lower (higher) than
expected, given the actual
level of activity for the period.
 XYZ Fish House
Flexible Budget performance report
For the month of Ended……..

Planning Activity Flexible Revenue & Actual

Budget(1) Variance(2- Budget(2) Spending Results(3)
1) Variance(3-2)
Meals served 1800 1700 1700

Revenue($16.50q) 29700 1650(u) 28050 130(u) 27920

Expense:
cost of
ingredients($6.25q)
11250 625(f) 10625 485(u) 11110
wages &
salaries($10,400) 10400 0 10400 270(f) 10130
utilities($800+$0.20q) 1160 20(f) 1140 60(f) 1080
rent($2200) 2200 0 2200 0 2200
miscellaneous($600+$0. 2040 80(f) 1960 280(u) 2240
80q) 27050 725(f) 26325 435(u) 26760
Total Expense
2650 925(u) 1725 565(u) 1160
Net Operating Income