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1 C 9 - PROFIT PLANNING notes-c9.doc Written by Professor Gregory M. Burbage, MBA, CPA, CMA, CFM © CHAPTER LEARNING OBJECTIVES: MAJOR: - Calculate selected budgeted amounts based upon given data. - Be familiar with various budgets and master budget. NOT IMPORTANT: - Memorizing all budget formats as shown in text. - Memorizing the exact order of budget preparation. A BUDGET is a formal (detailed and in writing) plan for the future expressed in quantitative terms. Good budgeting includes Planning and Control. PLANNING is developing future objectives and formulating the steps necessary to achieve those objectives. I.e., PLAN CONTROL is the means taken to ensure the organization achieves the objectives. I.e., DO & REVIEW Benefit of budgeting is that it coordinates the activities of the organization. In effect, everyone working together for a common goal. RESPONSIBILITY ACCOUNTING is holding accountable those managers who have the ability to control costs. I.e., evaluating managers based upon their area of control (responsibility). PERPETUAL BUDGET is usually 12 months, adding on one month as one month drops off. SELF IMPOSED (PARTICIPATIVE) BUDGET is prepared with the cooperation and participation of all levels of management.
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notes-c9 - C9- PROFIT PLANNING notes-c9.doc Written by...

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