SMG AC 222 Lecture Notes - Lecture 8: Financial Statement, Resource Allocation, Income Statement
Document Summary
A budget is a detailed plan for the future of the company, expressed for the most part in quantitative terms. Planning is the process of developing goals and setting out procedures to meet them. Manufacturing, merchandising, and service companies follow similar budgeting procedures, but there are differences related to what the goals of each type of company are. The order in which budgets are prepared reflects the acquisition and use of assets: sales. Payments: selling and administrative expenses, cash budget, budgeted financial statements. Responsibility accounting maintains that a manager should be held responsible for those items over which that manager has control. Planning: set goals, describe how they will be achieved. Communication: everyone in the organization will be aware of the goals and plans, and their. Planning: avoid putting out fires, that is, crises caused by a lack of foresight. Constraints: (bottlenecks) identify these before they become a reason for goals to be missed. (see chapters 2, 12)
