BEC 4 M5 Budgeting: Part 1 Flashcards
Order of budget creation
- Sales budget
- Operating budget
- production/selling/personal budgets
- financial budget
static budget contains
budgeted costs for budgeted output
flexible budget contains
budgeted costs for actual outputs
budgets need to be
detailed in order that the key assumptions can be better understoof
Ideal standards budgeting
represent costs that result from perfect efficiency and effectiveness
Currently attainable budgeting
represent costs that result from work performed by employees with appropriate training and experience
Authoritative budgeting
set exclusively by management
Participative budgeting
set by both managers and individuals who are held accountable for those standards
Needed employee formula
Units produced /units per hour=required hours
hour required/monthly hours per employee=employees needed
information contained in a COGM budget would most directly relate to
materials used, direct labor, overhead applied, WIP inventories
budgeted production
budgeted sales in units
+desired inventory
-beginning inventory
units of directed materials to be purchased
units of dir mat needed
+desired ending inv
-beg inv
cost of direct materials to be purchased
units of dir mat to be purchased*cost per unit
direct material usage
beg inv
+purchases at cost
-end inv at cost
total wages
budgeted production in units
- hours(or fractions) required per unit
- hourly wage rates
