A _______ is a set of budgeted financial statements and supporting schedules.
Three types: Operating, Capital Expenditures, and Financial.
A Master Budget is a set of _______ and ________.
The three types include _______, _______, and ________.
21-1
The _____, ______, and _______ budgets make up the budgeted income statement.
The Sales, Inventory, and Operating Expenses budgets make up the __________.
21-1
The sales budget forecasts ________ and is the __________ of the master budget.
Budgeted Total Sales = ______ x _______
The ______ forecasts sales revenue and is the cornerstone of the _________.
_________= Sales price x Expected # of units sold
21-3
COGS = ____ + ____ - ____
Purchases = ____ + ____ - _____
____ = Beginning Inv + Purch - End Inv
____ = COGS + End Inv - Beg Inv
21-3
Prepare a Cash Budget:
_______ XX
_______ XX
_______ XX
_______ XX
_______ XX
_______ XX
_______ XX
Beg Cash Bal XX
Cash Collections from Custs XX
Cash Avail Before Financing XX
Total Cash Pmts XX
End Cash Bal Before Financing XX
Less: Min Cash Bal Desired XX
= Cash Excess/Deficiency XX
This the order for ___________.
21-3
The operating expense budget includes _____, ____, _____, and _____. Expenses can be either _____ or _____.
The ________ budget includes salaries, rent, insurance, and advertising. ______ can be either fixed or variable.
21-3
The financial budget includes the _____, _____, and the _____.
The ________ budget includes the cash budget, budgeted balance sheet, and budgeted statement of cash flows.
21-4
The cash budget includes details on ___________.
Four major parts: _____, _____, _____, _____.
The _____ budget includes details on how the business expects to go to from the beginning cash balance to the desired ending balance.
Four major parts include:
Cash collections from customers and cash payments for purchases, operating expenses, and capita
Parts of the Cash Budget:
The Cash Collections from Customers section includes the ____ from the ____ budget and ____.
The Cash Pmts for Purchases section includes _____ and _____.
Parts of the _____:
The __________ section includes the sales from the sales budget and the collection of accounts receivable from previous month's credit sales.
The _________ section includes pmt of current mo purchases from the Purchases Budget and paym
Parts of the Cash Budget:
The Pmts for Op Expenses Budget includes data from the _____ and does not include ______.
The Pmts for Capital Expenditures Budget uses _____.
Parts of the _____:
The _______ budget includes data from the operating expense budget and does not include non cash expenses such as depreciation.
The ______ uses budgeted data.
21-4
A sensitivity analysis determines ___________.
Companies often use the ______ software for budget management.
A ________ determines the result if predicted amount differ from those budgeted.
Companies often use the Enterprise Resource Planning software for ___________.
21-5
Responsibility Accounting is _____________.
There are four types: _____, _____, _____, and _____.
__________ is a subunit of organization whose manager is accountable for specific activities.
The four types include the Cost, Revenue, Profit, and Investment Centers.
21-6
In the Profit Center, mgrs are accountable for _______ and _______.
The Investment Center mgr is accountable for _______, _______, and _______. Their goal is to increase return on ______, _____, or ______.
In the _________, managers are accountable for revenues and costs.
The _________ is accountable for investments, revenues, and costs. Their goal is to increase ______ on investment, residual income, or economic value added.
21-6
Performance reports ________________.
A division of a company is considered a ______ center.
Product lines are considered part of the ________ center.
Production is part of the ______ center.
Sales are part of the _______ center.
_________ directs exec at
________ compare budgeted and actual amounts.
A ______ is considered an investment center.
________ are considered part of the profit center.
_________ is part of the cost center.
________ are part of the revenue center.
Management by Exception __________
Two benefits of budgeting: _____ and _____.
________ do not show on a cash budget.
The ______ is the cornerstone of the master budget.
Two benefits of ________: 1) improves decision-making process and employee motivation 2) focuses mgmt.'s attention on the future.
Depreciation expenses do not show on a _________.
The Sales budget is the cornerstone of the ________.
21
A sales budget is part of the __________ budget.
The ________ is prepared as the final step in the preparation of the financial budget.
The mgr of the cost center is primarily responsible for __________.
A _______ is part of the operating budget.
The budgeted statement of cash flows is prepared as the _______ in the preparation of the _________.
The manager of the ______ is primarily responsible for controlling expenses.
21
A static/master budget is prepared for _______ of sales volume where the flexible budget is prepared for ________.
The flexible budget separates _____ and _____ costs.
A _____ is prepared for only one level of sales volume where the ______ is prepared for several different volume levels within a relevant range.
The _______ separates fixed and variable costs.
22-1
The flexible budget is based on ______ number of outputs and the static/master budget is based on the _____ number of outputs.
The ______ budget is based on the actual number of outputs and the ______ budget is based on the expected number of outputs.
22-2
Sales Volume Variance = _____ - _____
Flexible Budget Variance= ____ - _____
________ = Master Budget (expected) - Flexible Budget (actual)
_______ = Flexible Budget (actual # sold) - Actual results (actual # to be sold)
22-2
The Flexible Budget includes the ________ and are expensed _______.
The Static/Master Budget includes the ________ and are expensed _______.
A Flex Budget Variance arises due to ________.
A Sales Vol Variance arises because _________.
The _______ includes the actual # units sold and are expensed at the predicted amts.
The _______ includes the predicted # units sold and are expensed at the predicted amts.
A _______ arises due to more/less revenue or cost than expected for the ACTUAL lev
The Flexible Budget Variance is the difference between the ______ and the _______.
The Sales Volume Variance is the difference between the _____ and _____.
The ______ is the difference between the actual results and the flexible budgets.
The ____ is the difference between the static and flexible budgets.
22-2