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24 Cards in this Set
- Front
- Back
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what is the usual starting point for the operations budget
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revenues budget
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many factors influence the sales forcast, including
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sales volume in recent periods
general economic and industry conditions market research studies pricing policies adverising and sales promotions competition regulatory practices |
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purchases of direct materials is calculated how?
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Direct materials usedin production + targeted ending inventory of direct materials - beginning inventory of direct materials
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Preparing Budgets Steps
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Step one: Prepare Revenues Budget
Step two: Prepare the production budget Step Three: DM Usage Budget and DM Purchases Budget Step Four: DML Costs Budget Step Five: MOH Costs Budget Step Six: Ending Inventories Budget |
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a budget is
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the quantitative expression of a proposed plan of action by management for a specified period and an aid to coordinating what needs to be done to implement that plan
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a budget generally includes
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financial and nonfinancial aspects
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a financial budget quantifies managements expectations regarding
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income, cash flows and financial position
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srategic plans are expressed through ____ and operating plans via_____
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long-run budgets; short run budgets
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The master budget expresses
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management's operating and financial plans
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operating decisions deal with
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how to best use the limited resources of an organization
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financing decisions deal with
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how to obtain the funds to acquire the resources of an organization
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budgeted financial statements are also called
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pro forma statements, or profit plan
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rolling budget is also called a
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continuous budget
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How do you calculate the Direct labor hours budget
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budgeted units times the budgeted hours per unit.
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how do you calculate the DM Labor Cost Budget
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budgeted units times the budgeted hours per unit times the budgeted rate per hour
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in according to GAAP variable and fixed manufacturing costs are treated as
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inventoriable costs
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How do you calculate the ending inventories budget
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Cost of unit per input time input per unit of Output for DM + DL + MOH
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How do you prepare the Cost of Goods Sold Budget
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Beginning Finished goods inventory + (DM used + DL + MOH=COGM)= COGAFS - Ending finished goods inventory-COGS
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What are the components of the Budgeted Income Statement, generally
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Revenus - COGS = Gross Margin
Gross margin - Operating Costs = Operating Income |
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four types of responsibility centers are
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cost center
revenue center profit center investment center |
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in a profit center the manager is responsible for
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revenues and costs
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in an investment center the manager is responsible for
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investments, revenues and costs
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a master budget is useful for
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planning
facilitating communication and coordination allocating resources controlling profit and operations motivating employees and managers evaluating performance and providing incentives |
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Things to do:
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Finish problem 28, do CASH BUDGET
BUDGETED INCOME STATEMENT BUDGETED BALANCE SHEET |
