Profit Planning

Profit Planning - Profit Planning Budget Framework Budget Detailed quantitative plan for acquiring and using financial and other resources over a

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Profit Planning - Budget Framework o Budget – Detailed quantitative plan for acquiring and using financial and other resources over a specified forthcoming time period. o Budgeting – Act of preparing a budget o Budgetary Control - Use of budgets to control an organizations activity - Planning and Control o Planning – Involves developing objectives and preparing various budgets to achieve these objectives o Control – Involves the steps taken by management that attempt to ensure the objectives are attained - Advantages of Budgeting o Communicate plans o Coordinate Activities o Define goal and objectives o Uncover potential bottlenecks o Think about and plan for the future o Means of allocating resources - Responsibility Accounting – Managers should be held responsible for those items – and only those items – that the manager can actually control to a significant extent - Choosing a Budget Period o Annual Operating Budget – Divided into quarterly or monthly budgets o Continuous Budget – A 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed
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This note was uploaded on 03/17/2009 for the course ACCT 222 taught by Professor Wainberg during the Spring '08 term at UMass (Amherst).

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Profit Planning - Profit Planning Budget Framework Budget Detailed quantitative plan for acquiring and using financial and other resources over a

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