GEO 509 Chapter Notes - Chapter 9: Finished Good, Total Absorption Costing, Infor
28 Feb 2018
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Master budget: summarizes a company"s plans, setting specific targets for sales, production, distribution, administrative, and financing activities. 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. Make sure that nothing falls through the cracks and that the organization reacts quickly and appropriately to deviations from its plans and learns from the feedback it gets by comparing budgeted goals to actually results. Continuous or perpetual budget: a 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed. One month (or quarter) is added to the end of the budget as each month (or quarter) comes to a close. This approach always keeps managers focused at least one year ahead so that they do not become too narrowly fixated on short-term results.
