Notes Chapter 9

Notes Chapter 9 - Notes Chapter 9 Profit Planning Profit...

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Notes Chapter 9: Profit Planning Profit Planning: the steps taken by businesses to achieve their planned levels of profits I. The Basic Framework of Budgeting a. Budget: a quantitative plan for acquiring and using resources over a specified time period b. Master Budget: a summary of a company’s plans including specific targets for sales, production, and financing activities b.i. Planning: developing goals and preparing various budgets to achieve those goals b.ii. Control: steps taken by management to increase the likelihood that all parts of the organization are working together to achieve the goals set down at the planning stage c. Advantages of Budgeting c.i. Communicate management’s plans c.ii. Make managers think about future plans c.iii. Provides a means of allocating resources c.iv. Uncovers potential bottlenecks before they occur c.v. Coordinate the activities of the entire org. by integrating the plans c.vi. Defines goals and objectives d. Responsibility accounting: follows idea that the manager should be held
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This note was uploaded on 11/21/2011 for the course BUS 215 taught by Professor Babineau during the Winter '08 term at Cal Poly.

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Notes Chapter 9 - Notes Chapter 9 Profit Planning Profit...

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