ADMS 1500 Chapter Notes - Chapter 10: Budget, Finished Good, Income Statement

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** practice cp, self study question, and assigned question. Master budget: a set of interrelated budgets that constitutes a plan of action for a specified time period. Contains two classes of budgets: operating budgets: Individual budgets that result in the preparation of the budgeted income statement establish goals for sales and production personnel. The capital expenditures budget, the cash budget, and the budgeted balance sheet focus primarily on cash needs to fund operations and capital expenditures. Concept of sales budget, production budget, material, labour, and overhead budget. Shows the units that must be produced to meet anticipated sales: derived from sales budget plus the desired change in ending finished goods (ending finished goods less the beginning finished goods units) Shows both the quantity and cost of direct materials to be purchased: derived from the direct materials units required for production (from the production budget) plus the desired change in ending direct materials units.

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