Illinois State, ACC 230

Excerpt: ... Accounting 230 Chapter 6 Study Information Horngren 13th Ed. 1. You should be able to define the following terms: budget, master budget , operating budgets, financial budgets, continuous (rolling budgets), kaizen budgeting, activitybased budgeting, responsibility accounting, controllable costs, and budgetary slack. 2. You should be able to list and discuss several of the advantages of budgets. 3. You should be able to discuss the time coverage of budgets. 4. You should know the order in which operating budgets are prepared. 5. You should be able to prepare, in good form, a sales budget, production budget, materials purchases budget in units and dollars, and a cash budget. 6. You should be able to describe what the managers of the following responsibility centers are responsible for: cost center, revenue center, profit center, and investment center. ...

Northwood, ACCOUNTING 232

Excerpt: ... 23 Master Budget s and Planning Date: _ Class Notes Chapter 24 Flexible Budgets and Standard Costs Date: _ Class Notes Chapter 25 Capital Budgeting and Managerial Decisions Date: _ Class Notes ...

Columbia Union, ACCT 309

Excerpt: ... 1 Chapter 14 The Master Budget Planning is the cornerstone of effective management. 2 Budget Process Budget expresses organizations commitment to planned activities and resource acquisition and use End result of process A type of standard 3 Uses of Budgets Control through calculation of variances Identify potential problems Communicates objectives, constraints, and expectations Participation in process helps to produce spirit of cooperation, motivate employees, instill feeling of teamwork 4 5 The Planning Process Strategic Planning Performed by top-level management Statement of organizational mission, goals, and strategies Long-range Foundation on which short-term planning is based Identify key variables Gather information about key variables 6 Tactical Planning Performed by top and mid-management Provides direction for achievement of strategic plans States strategic plans in terms on which managers can act Furnishes bas ...

Luther, ACCTG 250

Excerpt: ... ACCT 250 ACCOUNTING FOR DECISION MAKING NOTES CHAPTER 8B SPRING 2008 SUMMARY Here we introduce the role budgets play and the process of budgeting. NOTES 1) The role of budgets a) What is a budget? A plan for action in a coming period including financial and non-financial info Master budget includes: o Operational budgets o Financial budgets b) Why do it? Provides a plan the exercise of planning is highly correlated to success Provides a yard-stick something to measure actual results against o People know what is expected of them provides motivation Provides an opportunity for mid-level managers to be involved in planning Provides coordination among different operating units of the firm Identifies issues which need to be resolved Budgets often serve as targets for bonus compensation can create problems! 2) Connection to strategy As we discussed in chapters 1 and 2, strategy drives many key decisions An annual review of the firm's strategy and long-range plan sets the table o Generally a ...

FAU, ACG 2071

Excerpt: ... Chapter 7 The Master Budget 2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 7-1 Objective 1 Explain the major features and advantages of a master budget . 2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 7-2 Advantages of Budgets Budgets Goals and Objectives 2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 7-3 Advantages of Budgets Compels managers to think ahead Aids managers in coordinating their efforts Provides definite expectations that are the best framework to evaluate performance 2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 7-4 Types of Budgets Strategic Plan Long-Range Plan Capital Budget Master Budget Continuous Budget 2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 7-5 Stra ...

Temple, ACCT 2521

Excerpt: ... Budgeting Chapter 6 Vocabulary Budget = quantitative expression of a firm's strategic plan of action Master budget vs. Flexible Purpose and management intentions - planning &/or control Participative budgeting - a.k.a. self-imposed budgeting Preparing the budget Pick period(s): fiscal quarter vs. rolling Project sales Plan production activity level Sales prediction Current finished goods inventory Desired ending finished goods inventory Plan purchases, employment Estimate fixed costs Cash budget Prepare estimated income statements and balance sheets 1 Behavioral aspects Participative budgeting Better information Better cooperation But also budgetary slack Dysfunctional responses `Stretch' vs. Highly achievable budgets Incremental vs. Zero-Based budgeting Compulsion to spend all discretionary funds Short-run emphasis on budget only Questionable actions designed only to balance the budget Uses of budgets Planning O ...

SEMO, AC 222

Excerpt: ... Study Guide for Final Exam Fall 2008 The final exam for the Fall 2008 for AC222 covers Chapters 23, 24, and 25 and is comprised of 37 multiple choice questions and 4 problems. Be sure you know how the following: benefits of budgeting factors to consider in preparing a sales forecast preparation of sales budget, production budget, cash budget components of master budget , operating, and financial budgets order of preparation of various budgets preparation of flexible budget definition of management by exception calculations of variances for direct materials, direct labor, variable overhead, and fixed overhead decision making using incremental analysis (incremental revenue and incremental costs), including acceptance or rejection of a special order, make or buy decisions, sell or process further, and impact of elimination of an unprofitable product line. definitions of opportunity cost, sunk cost, and out-of-pocket cost calculation of the accounting rate of return, cash payback period, net present value, and int ...

Cal Poly, ACTG 212

Excerpt: ... CHAPTER 12 DEVELOPING A BUSINESS PLAN FOR A MANUFACTURING COMPANY: BUDGETING 1 Chapter Overview What are the similarities and differences between a large company's master budget and that of an entrepreneurial company? What are the similarities and differences between a large company's master budget and that of a retail company? How is a manufacturing company's operating cycle difference from that of a retail company? 2 Chapter Overview Is there a strategy a manufacturing company can use to complete its budget? If a company's actual sales are different than its budgeted sales (or actual production is different from budgeted production) for the same time period, how can managers meaningfully evaluate how well the company met its cost goals? How do budgets affect the business decisions that employees make? 3 Manufacturing Company Master Budget A manufacturing company's master budget might include these related components Sales budget Production budget Direct materials budget Direct labor budget Fact ...

South Central College, ACC 210

Excerpt: ... of budget reports that compare actual results with planned objectives. The budget reports provide management with feedback on operations. Budgetary control involves: a. Developing budgets. b. Analyzing the differences between actual and budgeted results. c. Taking corrective action. d. Modifying future plans, if necessary. Budgetary control works best when a company has a formalized reporting system. The system should a. Identify the name of the budget report such as the sales budget or the manufacturing overhead budget. b. State the frequency of the report such as weekly, or monthly. c. Specify the purpose of the report. d. Indicate the primary recipient(s) of the report. 2. 3. Static Budget Reports 4. (S.O. 2) A static budget does not modify or adjust data regardless of changes in activity during the year. As a result, actual results are always compared with the budget data at the activity level used in developing the master budget . A static budget is appropriate in evaluating a manager's effective ...

Rutgers, ACCT 451

Excerpt: ... Overhead Overhead Rate per MachineCosts Hour (2) (5) $10,400,000 $ 4.3333 10,400,000 6.50 10,400,000 6.9333 10,400,000 10.00 Denominator-Level Capacity (Machine-Hours) (6) = (2) (5) 2,400,000 1,600,000 1,500,000 1,040,000 9-41 9-40 (30 min.) Cost allocation, downward demand spiral. SOLUTION EXHIBIT 9-40 2007 2008 Master Practical Master Budget Capacity Budget (1) (2) (3) $3,832,500 $3,832,500 $3,832,500 2,555,000 3,650,000 2,190,000 Budgeted fixed costs Denominator level Budgeted fixed cost per meal Budgeted fixed costs Denominator level ($3,832,500 2,555,000; $3,832,500 3,650,000; $3,832,500 2,190,000) $ Budgeted variable cost per meal Total budgeted cost per meal $ 1.50 $ 3.80 5.30 $ 1.05 $ 3.80 4.85 $ 1.75 3.80 5.55 1. The 2007 budgeted fixed costs are $3,832,500. MedChef budgets for 2,555,000 meals in 2007, and this is used as the denominator level to calculate the fixed cost per meal. $3,832,500 2,555,000 = $1.50 fixed cost per meal. (see column (1) in Solution Exhibit 9-4 ...

JMU, A 620

Excerpt: ... ting Pages 286-288: Comparison of Income under Absorption vs. Variable Costing Page 295: Variable Costing and Absorption Costing sections Page 298-301: Choosing a Costing Method Pages 322-324: Pages 324-330: Pages 330-335: Pages 350-351: Introduction to Activity Based Costing Designing an ABC system Mechanics of an ABC system Summary MODULE SIX Pages 440-442: Introduction to Standard Costing Pages 442-443: Ideal vs. Practical Standards Pages 447-448: A General Model for Variance Analysis Pages 446-456: A Closer Look at Material and Labor Variances Note: After class, read pages 456-457 on Overhead Variances Pages 459-461: Management by Exception Pages 462-463: Evaluation of Controls Based on Standard Costs Note: Remainder of Chapter 10 might be interesting to scan Pages 386-397: The Master Budget and its Components Pages 404-406: Review Problem Page 407-414: EOQ, Re-order Point, and Production Lot Size Determination (study in depth) Page 504-507: Flexible Budgets (through "How a Flexible Budget Works") Note: ...