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10 Cards in this Set
- Front
- Back
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adverse/favorable variance
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difference between the budgeted and actual figures which has a negative / positive impact on profit
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Budgets
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financial plan for medium to long term. budgets include income, production, expenses and master.
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cost centre
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Sections of a business that are distinct from others and to which costs can be attributed
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inventory
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this is the stock of goods held for re-sale. These are one of the current assets of a business.
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limiting factor
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a constraint placed on a business's budgets e.g. capacity. determines which budget is drawn up first.
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Over trading
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Rapid growth which places significant burden on a business's ability to meet its debt.
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revenue
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total value of salesmade within a trading period. units sold × price per unit
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sensitivity analysis
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technique which is used to try and reduce the uncertainty in decision - making. e.g. adjusting variable cost to assess impact of change
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variable costs
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costs that change with output
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zero budgeting
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where budgets are set a £0 and therefore managers have to fully justify spending levels in the future.
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