Acc ch.21

Question 1

Budgetary control

Answer 1

This refers to management use of budgets to plan, monitor and control a company’s operations

Question 2

Process for budget

Answer 2

Develop a budget
Compare actual to budget
Take corrective action
Establish new planned objective/budget

Question 3

Budget

Answer 3

A formal written statement of management plans for a specific further time period

Question 4

Master budget

Answer 4

A set of interrelated budgets that constitute a plan of action for specified time period
2 classes: operation end financial

Question 5

Operation budget

Answer 5

Individual budgets that result in the prep of the budgeted income statement

Question 6

Production budget

Answer 6

Budget sales unit+desired ending finished goods - beginning finished goods= required production units

Question 7

Direct materials

Answer 7

DM+ desires ending DM - beginning DM = required direct materials units

Question 8

Direct labor budget

Answer 8

Units to be produced x direct labor time per unit x direct labor costed per unit = total direct labor cost

Question 9

Financial budgets

Answer 9

Focuses primarily on the cash resources needed to fund operations and planned capital

Question 10

Operation budget steps

Answer 10

Sales budget 
Production budget 
Direct materials 
Direct labor 
Overhead 
Selling admin budget 
Budgeted income stamens

Question 11

Financial budget steps

Answer 11

Capital expenditure
Cash budget
Budgeted balance sheet