chapter 9 - reliable than estimates of higher management...

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Bus 215 Section 08 October 23, 2010 Homework Assignment: Chapter 9 Q9-5) A sales budget is a detailed schedule showing expected sales expressed in both dollars and units. The sales forecast is the starting point in budgeting because all the other aspects of the master budget depend on the sales budget. If the sales budget is inaccurate, it will then throw off all the other parts of the budget. Q9-8) A self-imposed budget or participative budget is a budget that is the most effective way to prepare with the full operation and participation of managers at all levels. The advantages of the self-imposed budget are: 1) Individuals at all the levels of the company are recognized as members of the team whose opinions are valued by top management 2) Estimates prepared by front-line managers are often more accurate and
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Unformatted text preview: reliable than estimates of higher management who have less knowledge of markets and day-to-day operations. 3) They create commitments and motivations for individuals 4) Excuses cannot be made by individuals because they are setting their own budget. Q9-10) No, I disagree. The cash budget is a detailed plan showing how cash resources will be acquired and used for management. Since it is broken down into time periods, it is also used to capture major fluctuations in cash balances. Basically, the cash budget is to see how a companys cash is flowing throughout the year. However, it can tell you how much cash is in the bank at the end of the year but it is not the primary purpose....
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