chap 9 10 11 Flashcards
is a detailed quantitative plan for
acquiring and using financial and other resources
over a specified forthcoming time period.
budget
act of preparing a budget is
budgeting
use of budgets to control an
organization’s activities
budgetary control
involves developing
objectives and
preparing various
budgets to achieve
those objectives.
Planning
involves the steps taken by
management to increase
the likelihood that the
objectives set down while
planning are attained and
that all parts of the
organization are working
together toward that goal.
CONTROL
ordinarily cover a one-year period corresponding to a company’s fiscal year. Many companies divide their annual budget into four quarters.
Operating budgets
is a 12-month budget that rolls
forward one month (or quarter)
as the current month (or quarter)
is completed.
continuous budget
is a budget that is
prepared with the full cooperation and participation of managers
at all levels.
self-imposed budget or participative budget
must be adequate to meet budgeted sales and to provide for the desired ending inventory.
production budget
are benchmarks or “norms” for measuring performance.
standards
specify how much of aninput should be used tomake a product orprovide a service
quantity standards
specify how much should be paid for each unitof the input.
cost ( price ) standards
Deviations from standard considered significant are brought to the attention of management, a practice known as
management by exception
Often a singlerate is used that reflectsthe mix of wages earned.
RateStandards
Use time and motion studies foreach labor operation.
TimeStandards
