Final Review Budgeting

Front 1

objectives of budgeting

Back 1

1.)establishing specific goals 2.) executing plans to achieve goals 3.) periodically comparing actual results with the goal

Front 2

budgeting affects 3 of the following managerial functions

Back 2

Planning, directing, controlling (PDC)

Front 3

Planning

Back 3

-setting up goals to guide decisions and help motivate employees.

-The planning process is often identifies where operations can be improved

Front 4

Directing

Back 4

-involves decisions and actions to achieve budgeted goals.

-A budgetary decision is often called a responsibility center

Front 5

controlling

Back 5

-involves comparing actual performance against the budgeted goals

-such comparisons provides feedback to managers and employees about their performance

Front 6

Human Behavior and Budgeting

Back 6

Budgeted goals that are set too tight = very hard or impossible to reach

Budgeted goals are set too loose (budgetary slack) = very easy to achieve

Budgeted goals conflict with the objectives of the company and employees

Front 7

Continuous budgeting

Back 7

-maintains a 12-month projection into the future

- continually revised by replacing the data for the month just ended with the budget data for the same month in the next year.

Front 8

Zero based budgeting

Back 8

requires managers to estimate sales, production, and other operating data as though operations are being started for the first time

Front 9

what are the two major budgets that uses the zero based budgeting approach?

Back 9

Static and flexible budget

Front 10

Static Budget

Back 10

Shows the expected results of a responsibility center for only one activity level. Once the budget has been determined, the budget does not change even if the activity changes.