ACCT 2101 Chapter Notes - Chapter 9: Long-Range Planning, Direct Labor Cost, Budget

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Formal written statement of a managements plan for a specified time expressed in financial terms: roll of accounting during the budgeting process is to provide historical data on revenues, costs and expenses, benefits. Creates an early warning system for potential problems: requires all levels of management to plan ahead, results in greater management awareness of the entity overall operations, motivates personnel throughout the organization. Facilitates the coordination of activities within the business. 1 year (continuous 12-month budget results from dropping the month just ended and adding the future month: budget committee. President, treasure, chief accountant and management personnel from each major area of the company. Each level of management is invited and encouraged to participate in the development of the budget. Criticism of a (cid:373)a(cid:374)ager"s performance is tempered with advice and assistance. Long range planning involves the selection of strategies to achieve long term goals. Long range plans contain considerably less detail than budgets: master budget.

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