Chapter 21 - 11-121-121BudgetingStudent...

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Unformatted text preview: 11-121-121BudgetingStudent Version11-221-21Describe budgeting, its objectives, and its impact on human behavior.21-211-321-31.Planning involves setting goals as a guide for making decisions.Objectives of Budgeting11.Directing involves decisions and actions to achieve budgeted goals.1.Controlling involves comparing actual performance against the budgeted goals.11-421-4A budgetary unit of a company is called responsibility center. Each responsibility center is led by a manager who has the authority and responsibility for achieving the centers budgeted goals.Responsibility Centers111-521-5Controlling Through FeedbackAs time passes, the actual performance of an operation can be compared against the planned goals. This provides prompt feedback to employees about their performance. If necessary, employees can use such feedback to adjust their activities in the future.111-621-6Although it is desirable to establish attainable goals, it is undesirable to plan lower goals than may be possible. Such budget padding is termed budgetary slack.Budgetary Slack111-721-7Goal conflictoccurs when individual self-interest differs from business objectives or when different departments are given conflicting objectives.Goal Conflict111-821-82Describe the basic elements of the budget process, the two major types of budgeting, and the use of computers in budgeting.21-811-921-9Continuous BudgetingA variation of fiscal-year budgeting, called continuous budgeting, maintains a twelve-month projection into the future....
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Chapter 21 - 11-121-121BudgetingStudent...

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