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23 Cards in this Set
- Front
- Back
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Budget
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a Quantitative plan for acquiring and using resources over a specified time period.
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Master Budget
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A summary of a company's plans including specific targets for sales, production, and financing activities.
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Budgets are for.....
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planning and control
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planning
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involves developing goals and preparing various budgets to achieve those goals.
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Control
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The steps taken by management to increase the likelihood that all parts of the organization are working together to achieve the goals set down at the planning stage.
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responsibility accounting
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that a manager should be responsible for those items and only those items that the manager can actually control to a significant extent.
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Continuous or perpetual budget
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A 12-month budget that rolls forward one month or quarter at the month or quarter comes to a close.
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self-imposed or participative budget
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A budget that is prepared with the full cooperation and participation of managers at all levels.
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budget committee
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usually responsible for overall policy relating to the budget program and for coordinating the preparation of the budget itself.
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Sales Budget
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A detailed schedule showing the expected sales for the budgeted year.
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Cash budget
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a detailed plan showing how cash resources will be acquired and used.
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Required production
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Budgeted sales
+ Desired ending inventory = total needs -beginning inventory =required production |
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Production Budget
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lists the number of units that must be produced to satisfy sales needs and to provide for the desired ending inventory.
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Merchandise Purchases Budget
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Shows the amount of goods to be purchased from suppliers during the period.
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Required purchases
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Budgeted sales
+ Desired ending merchandise inventory = total needs -Beginning merchandise inventory =required purchases |
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direct labor budget
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shows the labor-hours required to satisfy the production budget
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Direct labor costs
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# workers X # hours per worker X $ per hour = direct labor costs
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Manufacturing Overhead Budget
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Lists all costs of production other than direct materials and direct labor
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Ending Finished goods inventory Budget
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A budget showing the dollar amount of unsold finished goods inventory that will appear on the ending balance sheet.
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Selling and administrative expense budget
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lists the budgeted expense for areas other than manufacturing.
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Excess (deficiency) of cash available over disbursements
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Cash balance beginning
+ receipts = Total cash available - Disbursements = Excess (deficiency) of cash available over disbursements |
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Required Borrowings at the beginning of the firs quarter
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Desired ending cash balance
+ deficiency of cash available over disbursements = Minimum required borrowings |
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Required Borrowings at the Beginning of the second quarter
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Desired ending cash balance
+ deficiency of cash available over disbursements = minimum required borrowings |
