Production & Operating Cycle

 The production cycle is a recurring set of business activities and related data processing operations associated with the manufacture of products. In other

hand, it refers to the period during which the objects of raw products and

materials remain in the production process, from the beginning of manufacturing through the output of a finished product. There are four activities in production

cycle, i.e. product design, planning and scheduling, production operations, and

cost accounting.

The operating cycle is the average period of time required for a business to make an initial outlay of cash to produce goods, sell the goods, and receive cash

in exchange for the goods. It is useful for estimating the amount of working capital that a company will need in order to maintain or grow its business.

Cash Flow Statement vs. Cash Budget

 The cash flow statement looks at the past while the cash budget is for planning for the future

Sl .	Cash Flow Statement	Cash Budget
1	It shows the cash inflow	All expected cash receipts & estimates
2	Preparation done of the past events	Preparation done on forthcoming events
3	Use as tool of analysis & determine likely flow of cash	Surplus cash receipts planned for profitable investments
4	It starts with cash & cash equivalents & end with cash & cash equivalents	It starts with cash on hand & bank & close with cash on hand & bank
5	Basically, it prepared for financial accounting period	It may prepared for a month, quarter, half year or annual
6	It prepared for utility of external agencies	It is prepared as part of planning for the utility of internal management

Standard Costing

 Standard costing is the practice of substituting an expected cost for an actual cost in the accounting records, and then periodically recording variances that are

the difference between the expected and actual costs. It appeared in the early twentieth century, when transaction volumes were overwhelming the record keeping systems in use at that time.

Standard costing involves the creation of estimated (i.e., standard) costs for some or all activities within a company. The core reason for using standard costs

is that there are a number of applications where it is too time-consuming to

collect actual costs, so standard costs are used as a close approximation to actual costs.