ACCT 2230 Chapter Notes - Chapter 9: Variable Cost, Fixed Cost, Income Tax
12 Feb 2015
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Master budget: summary of a company"s plans that sets specific targets for sales, production, distribution and financing activities (i. e; cash budget, budgeted income statement, financing activities) Responsibility accounting: managers are held responsible for only those items of revenue and cost over which they can exert significant influence. They are held accountable for differences between budgeted and actual results. Continuous/perpetual budget: a 12-month budget where one month (or quarter) is added to the end of the budget as each month (or quarter) comes to a close: allows managers to keep focus of at least a year in advance. The participative budget: budgets are more accurate and reliable because they have more detailed knowledge of market factors and day-to-day operations, must be reviewed and agreed upon by supervisors. Budgetary slack- the difference between realistically attainable revenues and expenses, and the amounts included in the budget. Results in misallocation of resources, waste, less effort by managers.
