Budgeting

Question 1

What is a budget ?

Answer 1

A financial plan relating to the future.

Question 2

What are the main aims of budgeting ?

Answer 2

Planning for the future
Controlling costs
Co-ordination
Communication
Motivation
Evaluation
Authorization
Resource allocation

Question 3

What is the purpose of a budget committee ?

Answer 3

Is responsible for communicating policy guidelines to those who prepare, set and approve the budgets.

Question 4

What is a budget manual?

Answer 4

Preparation, use and responsibilities.

Question 5

What is a functional budget ?

Answer 5

Is a budget of income and/or expenditure which applies to a particular function.

Question 6

How do you work out production levels ?

Answer 6

[Units]
Sales
Cl inv of FG
Op inv of FG ()
= Fault-free production
Faulty waste
= Total production (100%)

Question 7

How do you work out budgeted materials cost ?

Answer 7

Material purchases budget =

Material usage quantity
Cl inv of mat
Op inv of mat ( )
= [Units]
@ Standard cost of materials
= Budgeted materials cost

Question 8

What is the general proforma for the Master budget - profit or loss ?

Answer 8

Sales
- Cost of sales: ( )
Op inv
Raw materials
Direct labor
Production OH
Cl inv ( )
= Gross profit
Non-production OH ( )
= Budgeted profit

Question 9

What is machine learning ?

Answer 9

a field within AI where computers do things rather than follow pre-programmed rules.