Short-Term Budgeting Flashcards
Module 1
a realistic plan expressed in quantitative terms for a certain future period of time.
Budget
composed of key management persons who are responsible for overall policy matters relating to the budget program and for coordinating the preparation of the budget itself.
BUDGET COMMITEE
goals and objectives identified in the budgeting process can serve as __________ or standards for evaluating performance.
benchmarks
revised on a regular basis.
Continuous (Rolling Budget)
based on only one level of activity (sales or production volume).
Fixed Budget
a series of budgets prepared for many levels of activity.
Flexible Budget
the current period’s budget is adjusted to allow for changes planned for the coming period.
Incremental
prepared every period from a base of zero, regardless of previous results.
Zero based budgeting
revenues and expenses are estimated over the product’s entire life cycle.
Life cycle
applies the ABC principles and procedures.
Activity-based
assumes the continuous improvement of products and processes.
Kaizen
the process is dependent on the organizational structure and purposes.
THE BUDGETING PROCESS
encompasses the organization’s operating and financial plans for a certain future period of time.
Master budget
period of time = ?
budget period
the master budget starts with the preparation of the _____.
Sales Budget
the projected amount of units a company anticipates selling in a set period of time and the revenue it could earn. it is a forecast based on trends and the business environment
Sales Budget
based on the budgeted sales and inventory policies.
Inventory policy is based on the number of units to be sold and the desired level of inventory.
Production Budget
based on the budgeted production.
Direct Materials Budget
based on the budgeted production and the number of standard direct labor hours needed per unit of production.
Direct Labor Budget
is constant in total and the std FOH rate is based on normal capacity.
Fixed overhead
In _______ the std FOH rate is considered constant.
short term budgeting
Unit ____ cost is constant.
Variable
Total variable OH costs change in relation to the ___________.
level of production.
