lecture 5 - Lecture 5 Budgets and Forecasts...

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Lecture 5 Budgets and Forecasts
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Learning objectives By the end of this section of the course  you should be able to: discuss the various reasons for  producing budgets explain what is meant by the `budget  process’ explain the stages and parties that are  typically involved in the budget process.
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Learning objectives discuss the factors which influence the  choice of the budget period explain what is normally included in  the master budget discuss the role of sales and  production budgets and the  relationship between them.
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Learning objectives Explain why, in addition to budgets for  materials and labour, it may also be  important to construct budgets for  overhead costs.
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Income statement review Intel income statement and accounts
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Key concepts the budget process responsibility accounting participative budgeting master budget
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Introduction Families budget expenses on expected  income. Government budget revenue and  expenditures. Business entities require accurate budgets for  their operations.
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Why Budget? A budget is a financial map or plan which is quite  often written in money terms.  It is used to prepare an organisation for the future  with the provision of answers to questions like: What financial situation do we want to be in at the end  of the year? How much do we need to spend to get there? How are we tracking at the moment? How much of our goods/services do we need to sell to  get there? 
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The purpose of budgets to compel planning to co-ordinate functions within an  organisation as a form of communication
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