Ch 10 Quiz Notes - than the budget Unfavorable variance –...

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AIM 3341 Chapter 10 Notes: Flexible budget – reflects a range of operations; prepared for multiple levels of sales volume; prepared at the beginning of the year for planning purposes and at the end of the year for performance purposes; separate fixed and variable costs to more accurately reflect the effects of activity levels on cost Budget – a formalized financial plan for operations of an organization for a specified future period Translation of an organization’s strategies; method of communicating; way to define areas of responsibility and decision rights Gross margin – Rev minus COGS Static budget – based on forecasts of specific volumes of production or services; prepared for a single level of sales volume; prepared at the beginning of the year Favorable variance – actual revenues are larger than the budget, or actual costs are lower
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Unformatted text preview: than the budget Unfavorable variance – actual costs are greater than budgeted or actual revenues are less than budgeted Rolling budget – prepared frequently for overlapping time periods and actual results may be used to update the budget for the next period; many organizations use rolling budgets because they incorporate more current info than either static or flexible budgets Cash budget – prepared after the operating budgets; they contain receipts, disbursements and short-term borrowings or investments Master budget – a comprehensive plan for an upcoming financial period, usually a year; reflect an organization’s future operating and financing decisions, and are often summarized in a set of budgeted financial statements...
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This note was uploaded on 04/19/2008 for the course AIM 3341 taught by Professor Thompson during the Spring '08 term at University of Texas at Dallas, Richardson.

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