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Related Flashcards
Related Topics
Cards In This Set
| Front | Back |
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budgeted sales units
+ desired ending FG = total FG available - beg. FG |
= total production units
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Budgeted Prodction
*Raw Materials Req. per unit = Total Raw Materials for production + desired ending - beginning DM units = units of DM to purch * Raw material cost/ lb, yard, ounce, ect |
= DM purchases in $
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Producion
* DL hrs/ unit = total DL hrs req. * DL rate/ hr |
= total DL cost
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Var OH rate
* total DL hrs = total var Oh + total FOH |
= Total OH cost
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Beg Cash Balance
+ C/R - C/D = Cash Excess (deficiency) Req Borrowing |
= Ending Case Bal (min bal req)
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Examples of Cash Deisbursements (C/D)
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Payments on:
DM purch DL MOH Selling and Admin exp Capital exp DIV |
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Benefits of Budgeting
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1. helps motivate employees to achieve sales growth and cost reduction goals
2. provides managers with a benchmark against which to compare actual results for performance evaluation 3. planning req. to develop the budget helps managers foresee and avoid potential problems before they occur |
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What is the most critical element of the master budget
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Sales budget
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The balance sheet is a part of which element of the master budget?
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The financial budget
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What is one element that would not be on the cash budget?
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Depreciation Expense
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List in order of preparation of the master budget
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Sale Budget
Production Budget DM DL MOH & FG invt budget Selling and Admin Exp Cash Budget Budgeted income statement Budgeted bal sheet |
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Static budget income (for the # of units expected to be sold) - flexible budget income(for the # of units actually sold)
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Sales Volume Variance
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Flexible Budget Rev/costs (for the # of units actually sold) - Actual rev/cost (for the # of units actually sold)
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Flexible Budget Variance
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Actual Sales > Budgeted Sales
OR Actual Cost < Budgeted Sales |
Favorable Variances --> incr income
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Budgeted Sales > Actual Sales
OR Actual Costs > Budgeted Costs |
Unfavorable Variances --> decr. income
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