Chapter 13 final

Question 1

Budget

Answer 1

a financial plan of the resources needed to carry out activities and meet financial goals

Question 2

Master budget is comprised of:

Answer 2

(1) Operating budgets
- Sales budget
-Production budget = direct materials, direct labor, overhead
- Cost of Goods Sold Budget
-Marketing and Administrative budget
- Income Statement budget
(2) Financial budgets
- Cash budget
- Balance sheet

Question 3

Budget preparation rests on

Answer 3

human estimates of an unknown future; people’s forecasts are likely to be greatly influenced by their experiences with various segments of the company