BUS 254 Lecture Notes - Lecture 9: Budget

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 254
• Professor: matt martell

Document Summary

Budgeting basics: rq lvls of mgmt to plan ahead, prov. For evaluating performance at ea lvl or responsibility: creates early warning system for potential problems, results in greater mgmt awareness, motivates personnel thruout org to meet objs. A budget is an aid to mgmt, not a substitue for mgmt. First budget prepared: mgmt "s best estimate of sales rev for budget period, prepared by multiplying expected unit sales volume for ea product & anticipated unit selling price. Shows unit that must be produced to meet anticipated sales: derived frm sales budget + desired change in ending finished goods, budgeted costs of dm to be purchased = rqed units of dm x anticipated cost per unit. Dm units rq + desired ending dm units - beg. Dm units = rq materials units to be purchased. Shows both quantity of hrs and cost of dl necessary: critical in maintaining a labour force that can meet expected prod.