Exam#3 Study Guide - BMGT 221 T 221 EXAM#2 STUDY GUIDE...

GT 221 EXAM#2 STUDY GUIDE
BMGT 221
Exam #3 Study Guide
CH-9 Budgets
A
How and Why
1.
Purpose
To express plan, to access and to reach goals; to plan for the future, and to control the revenue
and expense
2.
Development
a.
Step: Long-term strategic goal >>> key strategies
b.
Strategic planning (p476)
c.
Rolling budget (p477)
d.
Participative budgeting (p477)
e.
Start point: based on previous year/zero-based budgeting (p477)
3.
Benefit
a.
Planning: to plan for the future, rather than only consider daily operation
b.
Coordination and communication: to consider relations among operations across value chain
c.
Benchmarking: to motivate employees, and to help evaluate performance
4.
Master budgets (p479)
a.
Operation budget (p479) (accrual bases), starts with sales budget
(Sale budget-production budget-DM, DL, MOH budgets-operation expense budget,
budgeted income statement
b.
Financial budget (cash bases)
(Capital expenditures budgets-cash budgets-budgeted balance sheet)
B
Operation budgets
a.
Sales budget (p481)
Total expect sales revenue
=Expected no. of unit sales x expected sales price/unit
b.
Production budget (production > sales) (p482)
Safe stock (p481)
Units to produce
= Unites needed for sales + desired ending inventory (X% of next month’s sales) – units in
beginning inventory (X% of current month’s sales)
c.