7 a budget can have a significant impact on human

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7. A budget can have a significant impact on human behaviour. A budget may have a strong positive influence on a manager when: a. Each level of management is invited and encouraged to participate in developing the budget. b. Criticism of a manager's performance is tempered with advice and assistance. Better to ask, “who knows the most about this item?” rather than “who do we blame?” c. Budgets provide benchmarks which act as motivators for performance 8. Long-range planning involves the selection of strategies to achieve long- term goals and the development of policies and plans to implement the strategies. Long-range plans contain considerably less detail than budgets.
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The Master Budget 9. (S.O. 3) The master budget is a set of interrelated budgets that constitutes a plan of action for a specified time period. It is developed within the framework of a sales forecast which shows potential sales for the industry and the company's expected share of such sales. 10. There are two classes of budgets in the master budget: a. Operating budgets are the individual budgets that result in the preparation of the budgeted income statement. b. Financial budgets focus primarily on the cash resources needed to fund expected operations and planned capital expenditures. 11. The sales budget is the first budget prepared. It is derived from the sales forecast, and it represents management's best estimate of sales revenue for the budget period. It is prepared by multiplying the expected unit sales volume for each product by its anticipated unit selling price.
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  • Winter '12
  • Farrar
  • Revenue, Merchandiser, Nonmanufacturing companies

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