cornerstones_chp_7 - Chapter 7 Profit Planning 1 Accounting...

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May 26, 2011 Accounting 2102 1 Chapter 7 Profit Planning
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“All businesses should prepare budgets .” BUDGET . . . a Managerial Accounting tool that provides the information we need for planning, controlling, and decision making What is a budget? quantitative plan based on a company’s strategic plans Why budget? to plan for decision making for performance evaluation to communicate and coordinate May 26, 2011 Accounting 2102 2
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The Master Budget . . . a comprehensive financial plan May 26, 2011 Accounting 2102 3 Operating Budgets sales, production, DM purchases, DL, OH, S&A, ending FG, COGS, income statement Financial Budgets cash, balance sheet, capital expenditures some companies use a continuous budget . . . a moving budget Why?
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Sugar High, Inc. Sugar  High,  Inc.,  a  manufacturer  of  candy,  is  preparing its master budget for the coming year.  Information  regarding  its  projected  operations  follows . . .  May 26, 2011 Accounting 2102 4
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Sugar High, Inc. sales budget Sugar  High’s  sales  department  has  made  the  following  sales  forecast:  April, 20,000 units; May, 50,000 units; June, 30,000 units; July, 25,000 units; August, 15,000 units. All units sell for $10 each.  Prepare the sales budget for the second quarter. May 26, 2011 Accounting 2102 5 April May June # units x SP/unit estimated sales Are estimated sales equal to cash inflows?
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Sugar High, Inc. cash receipts budget
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This note was uploaded on 05/26/2011 for the course ACCT 2102 taught by Professor Farmer during the Spring '08 term at University of Georgia Athens.

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cornerstones_chp_7 - Chapter 7 Profit Planning 1 Accounting...

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