Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business > Budgeting > Flashcards

Budgeting Flashcards

1
Q

Budgeting standards

What is Ideal Standards?
What is advantage and disadvantage?

B2-32

A

Cost resulting from perfect efficiency and effectiveness in job performance
–no provisions for spoilage or downtime

A: continuous quality improvement to meet ideal
D: use of unattainable standards

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Budgeting standards

What is Currently Attainable Standards?
What is the advantage and disadvantage?

B2-32

A

Costs resulting from work performed by employees with appropriate training and experience
–provisions for spoilage and downtime

A: standards are reasonable
D: requires use of judgment and potential manipulation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Budgeting standards

What is Authoritative Standard
What is the advantage and disadvantage?

B2-32

A

are set exclusively by management

A: quick implementation and includes all costs
D: workers won’t accept it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Budgeting standards

What is participative standards?
What is the advantage and disadvantage?

B2-32

A

are set by managers and indiv who are held accountable

A: more likely accepted by workers
D: slower to implement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a standard?

B2-32

A
  • -per unit budgets

- -integral to the development of flexible budgets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Master Budget
What does it do?

B2-33

A

Documents specific short-term operating performance goals for a period of 1 yr or less
–includes Operating budget and Financial budget

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Master Budget
What else is it called?

B2-33

A

Static Budgets
Annual Business Plans
Profit Planning
Targeting Budgets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Master Budget
What are the limitations?

B2-33

A
  • -confined to 1 year at a Single Level of activity

- -best when combined w/ Flexible Budgeting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Master Budget
What budgets are produced?

B2-34

A

Operating Budgets

    1. sales budget
    1. production budget
    1. selling and admin budget
    1. personnel budget

Financial Budgets

    1. pro. forma financial statements
    1. cash budgets
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Operating Budget- Sales Budget
What is it?

B2-35

A
  • the foundation of the entire budget process
  • Anticipates sales in units and dollars
  • first to be prepared
  • it drives the development of other components of master budget
  • based on sales forecast
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Operating Budget- Production Budget
What is it?

B2-37

A
  • it is made up of amounts spent for DL, DM, FOH
  • amount is based on amounts of:
    • Inv on hand and
    • Inv necessary to sustain sales.
  • stated in units
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Operating Budget- Production Budget
How is it calculated?

B2-37

A

Budgeted Sales
+Desired EI
-Begin. Inventory
=Budgeted production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Operating Budget- Production Budget
Direct Materials Budget

B2-38

A

it is made up of:

  • -DM purchases budget
  • -DM usage budget
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Operating Budget- Production Budget
Direct Materials Budget

How do you calculate DM to purchase?

B2-38

A

units of DM needed for production
+desired EI
-BI
=units of DM to purchase

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Operating Budget- Production Budget
Direct Materials Budget

How do you calculate cost of DM to purchase?

B2-39

A

units of DM to purchase
x cost per unit
= cost of DM to purchase (purchases at cost)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Operating Budget- Production Budget
Direct Materials Budget

How do you calculate DM usage?

B2-39

A

BI at cost
+purchases at cost
-EI at cost
=DM usage (cost of materials used)

17
Q

Operating Budget- Production Budget
Direct Labor Budget

How do you calculate DL cost?

B2-39

A 
budgeted production (units)
x hours required to product unit
= total hours needed
x hourly wage rate
= total wages
18
Q

Operating Budget- Production Budget
Factory Overhead Budget

How do you calculate budgeted FOH?

B2-40

A
  • includes fixed and variable production costs that are not DM, DL
  • FOH is applied to inventory based on cost driver (usually DL hrs)

IL
+IM
+factory costs
=FOH budgeted

19
Q

Operating Budget- Production Budget
Cost of Goods Manufactured and Sold Budgets

How do you calculate COGM?

B2-41

A

DL
+DM
+FOH applied
=cost of goods manufactured

COGM is also called product cost

20
Q

Operating Budget- Production Budget
Cost of Goods Manufactured and Sold Budgets

How do you calculate COGS?

B2-41

A

cost of goods manufactured
+BI finished goods
-EI finished goods
=COGS

21
Q

Operating Budget- Selling and Admin Exp Budget
What is it?

B2-42

A
  • represents fixed and variable non-manufacturing exp

- are period costs and matched against budgeted sales

22
Q

Financial Budget- Cash Budgets

What is it?

B2-43

A
  • detailed projections of cash receipts and disbursements
  • divided into 3 sections
  • -1. Cash available
  • -2. Cash disbursements
  • -3. Financing
23
Q

Financial Budget- Cash Budgets

What makes up Cash Available?

B2-43

A
  1. Cash Balances (beginning cash)
  2. Cash Collections
    - -cash sales from current period
    - -collection of AR from prior period
24
Q

Financial Budget- Cash Budgets

What makes up Cash Disbursements?

B2-43

A
  • -cash paid for current period exp
  • -cash paid on AP/ accruals from prior period
  • eliminates noncash op. exp (depreciation, etc)

Two types of budgets:

  1. Purchases
  2. Operating Expense
25
Q

Financial Budget- Cash Budgets
Financing

B2-45

A

considers the matter financing will be used to maintain minimum cash balance

26
Q

Financing Budget- Cash budgets

How is it calculated

B2-45

A 
Begin cash
\+cash collections
-cash disbursements
=computed Ending cash
-cash required to sustain operations
=working capital loans to maintain cash required

Business (14 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions