to best allocate those funds. Here’s everything you need to help you create a budget using different approach. (a)Incremental Budgeting This is where the current budget and actual figures act as the starting point or base for the new budget. The base is adjusted for forecast changes to‚ for example‚ the product mix‚ sales volume‚ sales price‚ expenses and capital expenditure that are expected to occur over the next budget period. It is called incremental budgeting as the approach does not focus on
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Budgeting Process Budgets are often met with much hesitation. Often times‚ managers feel that the process is often too long and really does not help them run their departments or business. Let¡¦s explore the various stages of the budgeting process and evaluate their effectiveness. Then review how the role of the budget could serve as an analytic tool and be used to evaluate organizational performance‚ eliminate inefficiencies in an organization’s performance‚ and be a part of the business control
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organisation uses budgets to control the costs for a limit of period by equating what was spent during that time to the master budget. This benefits B.A as they would be observing all their expenses and returns which prevent them from surpassing their budgets. This business uses budgets because it is a valuable tool when evaluating B.A performance and value of their budget. Budgeting is beneficial to B.A as it helps them with planning orientation such as it helps to create a budget plan where it can
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not be problems in achieving the budget‚ sales below target‚ or having departments fight over the budget being wrong and how much more money that they can get. This is establishing goals that are not obtainable and the entire department should be able to give their input. BY giving their input it will allow for a better created budget. (b) Suggest how Peters Corporation’s budgeting process could be revised to correct the problems. In developing the budget‚ each level of management should
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___________________________________________________________ CHAPTER 8 QUESTIONS FOR WRITING AND DISCUSSION 1. Budgets are the quantitative expressions of plans. Budgets are used to translate the goals and strategies of an organization into operational terms. 2. Control is the process of setting standards‚ receiving feedback on actual performance‚ and taking corrective action whenever actual performance deviates from planned performance. Budgets are standards‚ and they are compared with actual costs and revenues to provide feedback
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(or profit planning) is a process or technique with broad applications in the management of a business‚ school or government agency. The rules apply to not-for-profits‚ as well. The process involves the formation of definite and specific plans or budgets for a limited future period‚ usually the ensuing fiscal or calendar year. These plans‚ which take into account all phases of the budgeted operations‚ are given expression in financial terms. They also become standards against which to measure and
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a sales budget by product line in both units and dollars. From this budget‚ sales quotas by product line in units and dollars are established for each of the corporation’s sales districts. The marketing manager also estimates the cost of the marketing activities to support the target sales volume and prepares a tentative marketing expense budget. The executive vice president uses the sales and profit targets‚ the sales budget by product line‚ and the tentative marketing expense budget to determine
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Making a Family Budget Does your family have a budget? Statistics shows that families with a budget are better off financially then families that don’t have a budget. Family budgets are not very hard to establish and once put into existence‚ they are not that hard to maintain. Family budgets are the backbone of most successful families and the lack of one is the demise of not so successful families. Family budgets are equal opportunity beneficiaries. Having a family budget is and essential part
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CHAPTER 6: MASTER BUDGET AND RESPONSIBILITY ACCOUNTING TRUE/FALSE 1. Few businesses plan to fail‚ but many of those that flop have failed to plan. Answer: True Difficulty: 1 Objective: 1 2. The master budget reflects the impact of operating decisions‚ but not financing decisions. Answer: False Difficulty: 1 Objective: 1 The master budget reflects the impact of operating decisions and financing decisions. 3. Budgeted financial statements are also referred to as pro
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Exam II I. TRUE / FALSE 1. A budget generally includes both financial and nonfinancial aspects of the plan. 2. The revenues budget should be based on the production budget. 3. A favorable variance should be ignored by management. 4. The direct manufacturing labor price variance is likely to be unfavorable if lower-skilled workers are put on a job. 5. For fixed overhead costs‚ the flexible-budget amount is always the same as the static-budget amount. II. MULTIPLE CHOICE
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