Planning Techniques Budgeting and Analysis Flashcards
What type of a budget is a single-use tactical plan?
Annual budget
What budget documents specific short-term operating performance goals?
Master budget
What does a master budget comprise of?
Operating and financial
How many years is a master budget confined of?
1 year
What are the different types of operating budgets?
Sales and production
What are the different types of financial budgets?
Pro forma financial statements and cash budgets
What budget is the foundation of the entire budget process?
Sales budget
Calculation for budgeted production
Budgeted sales + Desired ending inventory - Beginning inventory
Calculation for units of direct materials to be purchased for the period
Units of DM needed + Desired ending inventory - Beginning inventory
What are the 3 major section of the cash budget?
Cash available, cash disbursements, and financing
What are the 4 types of Strategic Business Units?
Cost, Revenue, Profit, and Investment
What are the designs of financial scorecards?
Accurate, timely, understable, and specific accountability
What are the 4 success factors of balanced scorecard?
Financial, internal business processes, customer satisfaction, and advancement of innovation
Who are the authoritative standards exclusively set by?
Management
What is the advantage of authoritative standards?
Implemented quickly
What is the disadvantage of the authoritative standard?
Workers might not accept imposed standards
Who are the participative standards set by?
Managers and the individuals
What is the advantage of participative standard?
Workers are more likely to accept.
What is the disadvantage of the participative standards?
Slower to implement
What is derived from input received from numerous organizational resources?
Sales forecasts
What are the elements of Cost of Goods Manufactured?
Direct labor, Direct material, and Factory overhead applied
Calculation for Price Variance
Actual quantity purchased x Actual price vs. Actual quantity purchased x Standard price
Calculation for quantity usage variance
Actual quantity used x Standard price vs. Standard quantity allowed x Standard price
Calculation for Rate Variance
Actual hours x Actual price vs. Actual hours x Standard rate
Calculation for Efficiency variance
Actual hours x Standard rate vs. Standard hours allowed x Standard rate
Calculation for Spending Variance(overhead)
Actual overhead vs. Budget amount based on actual hours worked
Calculation for Efficiency variance(overhead)
Budget amount based on actual hours worked vs. Budget amount based on standard hours allowed for production
Calculation for Volume Variance(overhead)
Budget amount based on standard hours allowed for production vs. Overhead Applied to WIP
