hsb business start
Which of the following is a true statement about budgets:
They are used for a variety of different purposes.
Customer benefits
products offered
What you charge for your products
products offered
Gather relevant data—in Wyatt's case, data will come from __________ and estimates. 3. Plug in the data.
research
Which of the following is a source of budgeting data for a start-up business:
research
You'll have to develop a budget," Aunt Thea tells him. "It's an estimate of your __________
revenue
Evaluate and __________ the budget as necessary.
revise
And, if you keep adding more time to the end of the budget period, it's called a(n) __________ budget."
rolling/continous
A business's main source of revenue is usually
sales income.
An advantage of incremental budgeting is that it
saves time
"One useful tool for budgeting is __________," Thea continues. "It's a method of measuring the effect a change in one variable will have on another variable. In your case, you might measure the effect that hiring a part-time employee would have on your overall sales volume and income."
sensitivity analysis
When employees do equal work and have equal responsibilities, the Equal Pay Act makes it illegal for businesses to discriminate in pay on the basis of
sex.
Aunt Thea fills Wyatt in on some common types of budgets. "A(n) __________ budget covers 12 months," she says.
short-term/operating
How you will approach advertising
strategy and implication
Plan for sales force
strategy and implication
Sections with corresponding page numbers
table of contents
A disadvantage of incremental budgeting is that it
isn't cost effective.
An internal method of recruiting employees is through
job postings
"This is your go-to budget to consult and adjust daily. A(n) __________ budget, on the other hand, usually covers about three years."
long-term
Number of employees in the business
management plan
Personnel costs
management plan
Industry outlook
market analysis
Information on target market
market analysis
A fixed budget is used to
measure profit or performance.
When upper management and department managers work together, the budgeting process becomes
more accurate.
Which of the following is a major disadvantage to a business of recruiting job applicants through outside agencies:
Cost of agency services
Which of the following budgets is used to compare to the fixed budget:
Flexible budget
Which of the following budgets serves as the go-to guide for managers to consult and adjust on a regular basis:
Short-term budget
Which of the following is an example of a fixed expense:
Insurance
Which of the following is an example of a variable expense:
Packaging/Shipping costs
Which of the following is a source of budgeting data for an established business:
Past tax returns
Every budget should contain which of the following two components:
Revenue and expenses
Which of the following is a true statement regarding the relationship between departmental budgets and the overall company budget:
The budgets must be in sync with one another.
The main advantage of a rolling budget format is
always having a short-term budget on hand.
Next, Aunt Thea explains budgeting strategies to Wyatt. "The traditional budgeting strategy is __________ budgeting," she says.
incremental
Company literature
appendices
Letters of reference
appendices
The first step in developing a budget for a department/company is to
choose or create a budget format.
Legal structure of the business
company description
Operating days and hours
company description
The end goal of budgeting is to plan and __________ organizational finances successfully.
control
Use the budget for financial planning and __________
control
A number for tracking purposes
cover page
Mission statement
executive summary
Purpose of the business plan
executive summary
and __________ for a certain period of time."
expenses
When screening applicants' résumés, businesses often use evaluation forms to qualify a person's training and
experience
Cash flow statement
financial plan
Income statement
financial plan
Wyatt learns that, to be financially successful, his budget must carefully track the money he brings in and the money he spends. Aunt Thea explains that __________ expenses are expenses that won't change with sales volume—Wyatt's rent, utilities, etc.
fixed
"You might want to create a budget to use as a guideline," Aunt Thea continues. "It's usually called a(n) __________ budget, and you don't change it.
fixed/master/static
You can create a(n) __________ budget to compare to it—kind of like an answer key and a test.
flexible/variable/dynamic
Lastly, Aunt Thea sums up the steps that Wyatt should take to develop his business budget: 1. Choose/Create your budget __________.
format
Sensitivity analysis aids in budgeting by measuring
how much a change in one variable will affect another variable.
A long-term budget typically covers a period of
three years.
Why do businesses routinely screen job applications and résumés?
to set up interviews
On the other hand, __________ expenses will go up and down depending on how much business Wyatt does.
variable
"When you use it, you just make small changes to the upcoming budget based on the results of the last budget. Unfortunately, though, it doesn't take changing circumstances and priorities into consideration. To do that, you'll need to use a __________ budgeting strategy. With that, you rebuild the budget from scratch each time. It takes longer, but it's more accurate."
zero-based
Rebuilding the budget for each new budgeting period is a strategy known as __________ budgeting.
zero-based