COMM 112 Chapter Notes - Chapter 9: Finished Good, Income Statement, Budget
Document Summary
Master budget: a su(cid:373)(cid:373)ary of a (cid:272)o(cid:373)pa(cid:374)y"s pla(cid:374)s i(cid:374) (cid:449)hi(cid:272)h spe(cid:272)ifi(cid:272) targets are set for sales, produ(cid:272)tio(cid:374), distribution, administrative, and financing activities; it generally culminates in a cash budget, a budgeted income statement, and a budgeted balance sheet. Bottlenecks: machines, activities or processes that limit total output because they are operating at capacity. Responsibility accounting: a system of accountability in which managers are held responsible for those items of revenue and cost over which they can exert significant influence and only those items. Managers are held responsible for differences between budgeted and actual results. Continuous or perpetual budget: a 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed. Participative budget: a method of preparing budgets in which managers prepare their own budget estimates. These (cid:271)udget esti(cid:373)ates are the(cid:374) re(cid:448)ie(cid:449)ed (cid:271)y the (cid:373)a(cid:374)ager"s supervisor, and any issues are resolved by mutual agreement, leading to a completed budget.
