Focus on: Planning, Control, and Analysis—Module 47
PLANNING, CONTROL, AND ANALYSIS
Flexible Budgeting
Used to estimate revenue, costs, a group of costs, or profits at various levels of activity
- Applies when operating within a relevant range
- Total fixed costs remain the same at all levels within range
- Variable costs per unit of activity remains the same within range
Master and Static Budgets
Static budget—Budget as specific level of activity
- Can be for division of company
- Can be for company as a whole
Master budget—Static budget for company as a whole
Master budget generally includes:
- Operating budget
- Budgeted cash flows
- Budgeted financial statements
Preparing a Master Budget
Budgeting Material Purchases and Payments
Units sold | |
+ | Budgeted increase in finished goods |
– | Budgeted decrease in finished goods |
= | Units to be manufactured |
× | Units of raw material per unit of finished ... |
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