Chapter 7 operating budgets bridging planning and

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CHAPTER 7 OPERATING BUDGETS: BRIDGING PLANNING AND CONTROL 6. What are the three reasons firms use budgets? 7. What are: (a) an operating budget, (b) a financial budget? 8. What is the natural starting point for the budgeting process? Why? 9. What budget typically is prepared immediately after the revenue budget? 10. What budgets follow from the production budget? CHAPTER 8 BUDGETARY CONTROL AND VARIANCE ANALYSIS 11. For many organizations, what is the benchmark for evaluating actual performance? 12. What is a master budget? 13. What is a variance? 14. What does it mean when a variance is favorable? What does it mean when a variance is unfavorable?
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15. What is the total profit variance? CHAPTER 9 COST ALLOCATIONS: THEORY AND APPLICATIONS 16. What is the appropriate measure of value for long-term decisions? 17. What is the difference between a contribution margin and a profit margin? 18. What are the two approaches for estimating the controllable cost of capacity resources over the long term? 19. Describe the direct estimation method for estimating controllable capacity costs. List one advantage and one disadvantage of this approach. 20. In addition to decision making, what are the other common uses of cost allocations? CHAPTER 10 ACTIVITY-BASED COSTING AND MANAGEMENT 21. What is the definition of unit profit margin? 22. What are the four key steps in designing a product costing system? 23. What is a business process? How are activities and business processes related? 24. What is the basis that ABC systems use to form cost pools? 25. What is the primary criterion that we should use when choosing a driver to allocate costs from an activity pool to products?
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