Chapter 8 - Master Budgeting
production budget
A detailed plan showing the number of units that must be produced during a period in order to satisfy both sales and inventory needs.
manufacturing overhead budget
A detailed plan showing the production costs, other than direct materials and direct labor, that will be incurred over a specified time period.
direct labor budget
A detailed plan that shows the direct labor-hours required to fulfill the production budget.
merchandise purchases budget
A detailed plan used by a merchandising company that shows the amount of goods that must be purchased from suppliers during the period.
selling and administrativ
A detailed schedule of planned expenses that will be incurred in areas other than manufacturing during a budget period.
sales budget
A detailed schedule showing expected sales expressed in both dollars and units.
self-imposed/particapative budget
A method of preparing budgets in which managers prepare their own budgets. These budgets are then reviewed by higher-level managers, and any issues are resolved by mutual agreement.
master budget
A number of separate but interdependent budgets that formally lay out the company's sales, production, and financial goals and that culminates in a cash budget, budgeted income statement, and budgeted balance sheet.
planning, control
2 purposes of budgeting
ending finished goods inventory budget
A budget showing the dollar amount of unsold finished goods inventory that will appear on the ending balance sheet.
budget
A detailed plan for the future that is usually expressed in formal quantitative terms
cash budget
A detailed plan showing how cash resources will be acquired and used over a specific time period.
direct materials budget
A detailed plan showing the amount of raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories.
control
The process of establishing goals and specifying how to achieve them.
planning
The process of establishing goals and specifying how to achieve them.