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Wk 4 Assessed Discussion Question

Wk 4 Assessed Discussion Question - to the budget to...

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1. Assessed Discussion Question: Master Budget 2. The master budget is a detailed and comprehensive analysis of an organization’s long- and short-term goals. Identify the major inputs to the master budget and the usefulness of each. Additionally, why would a company need to create a master budget? What are the advantages and disadvantages? 3. 4. A Master Budget is a document that is designed to set up budgeting plans. Master budgets may consist of 12 monthly budgets for the year or perhaps monthly budgets for only the first quarter and quarterly budgets for the three remaining quarters. The two major parts of a master budget are the operating budget and the financial budget. 1. Operating budget/profit plan – A major part of a master budge that focuses on the income statement and its supporting schedules o Sales budget o Purchases and cost-of-goods-sold budget o Operating expense budget o Budgeted statement of income A. Usefulness – It allows budget analysts to compare actual financial performance
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Unformatted text preview: to the budget to determine reasons for variances. This will allow you to address problems and resolve problems if you are under performing. 2. Financial Budget – The part of the master budget that focuses on the effects that the operating budget and other plans (such as capital budgets and repayments of debt) will have on cash o Capital budget o Cash budget o Budgeted balance sheet A. Usefulness – This allows you to keep track of cash available right now at the right time. 5. A master budget is needed to plan and control companies assets, equities, revenues, and costs that are involved in carrying out plans. Master budgets, compels managers to think ahead, provide an opportunity to reevaluate existing activities, and evaluate new ones, which all should be considered advantages. Some disadvantages of creating a master budget include the time involved in creating your budget, and the impact of a master budget that was forecast completely wrong. 6....
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Wk 4 Assessed Discussion Question - to the budget to...

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