ACIS 2116 Chapter 10 PowerPoints Spring 2009 Corrected

ACIS 2116 Chapter 10 PowerPoints Spring 2009 Corrected -...

Info iconThis preview shows pages 1–16. Sign up to view the full content.

View Full Document Right Arrow Icon
1 ACIS 2116 - Chapter 10 The Use of Budgets in Planning and Decision-Making
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 Budgeting A Budget is a detailed plan What resources must be acquired What resources must be used Specified period of time Management task – NOT bookkeeping task.
Background image of page 2
3 Budgeting Planning develop objectives prepare budgets to achieve objectives. Integral part of the planning , operating , and control activities of managers.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4 Budgeting Operating Day-to-day management decisions
Background image of page 4
5 Budgeting Control Ensure that objectives are met. Compare actual results to budget.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6 Budgeting for Cash May be most important part of budgeting. Cash on  hand Collection of  cash from  customers Disbursement of cash for  manufacturing costs or  purchases of inventory Sale of  Product
Background image of page 6
7 Zero Based Budgeting Means building budget from ground up. Cannot simply add percentage increase to last year’s numbers. Time consuming and costly to use. Requires managers to justify all budgeted expenditures, not just changes in the budget from the prior year.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
8 Participatory Budgeting Prepared with the full cooperation and participation of managers at all levels. S u p e r v i s o r S u p e r v i s o r M a n a g e m e n t S u p e r v i s o r S u p e r v i s o r T o p M a n a g e m e n t
Background image of page 8
9 Operating Budget Operating Budget Operating Budget 2004 2005 2006 2007 The annual operating budget The annual operating budget may be divided into quarterly may be divided into quarterly or monthly budgets. or monthly budgets. Used to plan for the short term.
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
10 Advantages of Budgeting Forces managers to think about and plan for the future. Helps managers: Define goals and objectives. Coordinate activities. Decide how to allocate resources. Uncover potential bottlenecks. Communicate plans.
Background image of page 10
11 Advantages of Budgeting Can motivate employees Can help employees become more cost conscious
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
12 Negative Behavioral Factors Managers are often evaluated and compensated according to whether the budget is met. This creates incentives for managers to: Lower targets (make them easier to reach) Raise estimated costs Shift revenues and expenses to another period
Background image of page 12
13 The Master Budget for a Manufacturing Company Production Budget Selling and Administrative Budget Material Purchases Budget Manufacturing Overhead Budget Direct Labor Budget Cash Budget Sales Budget Budgeted Financial Statements
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
14 Budgeting Example The Hokie Company sells T-shirts with the Hokie Bird on them. Hokie is preparing budgets for the quarter ending March 31. Each T-shirt sells for $20.
Background image of page 14
15 Budgeting Example First Budget: the Sales Budget Depends on a sales forecast Many factors influence sales forecast.
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 16
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/25/2009 for the course ACIS 2116 taught by Professor Cmeasterwood during the Spring '08 term at Virginia Tech.

Page1 / 75

ACIS 2116 Chapter 10 PowerPoints Spring 2009 Corrected -...

This preview shows document pages 1 - 16. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online