3.9 Budgets Flashcards
1
Q
Functions of budgets
A
- planning
- coordinating
- control
- motivation
- communication
2
Q
Cost centres
A
A section of a business, such as a department, to which costs can be allocated or charged.
3
Q
Profit centres
A
A section of a business to which both costs and revenues can be allocated.
4
Q
Variance analysis can be:
A
- adverse/unfavourable
- favourable
- positive
- negative
5
Q
Adverse variances
A
Unfavourable to the firm.
6
Q
Favourable variances
A
Beneficial to the business.
7
Q
Positive variance
A
Occurs where ‘actual’ exceeds ‘planned’ or ‘budgeted’ value.
8
Q
Negative variance
A
Occurs where ‘actual’ is less than ‘planned’ or ‘budgeted’ value.
9
Q
Variance
A
Actual outcome - Budgeted outcome
