Master Budget
This all-important budget, based on a forecast of unit sales and selling prices, is the foundation upon which the entire master budget is built.
What is the Sales Budget?
This key feature means the master budget is not a single document but a comprehensive package that includes all other lower-level budgets.
What is Comprehensive?
This is the quantitative plan of management's future expectations, often expressed in financial terms.
What is a Budget?
This method calculates the number of years required for an investment's cash inflows to recover its initial cost.
What is the Payback Period?
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What is the Pacific Ocean?
This budget calculates the number of units to be produced and is derived directly from the sales budget and the company's desired ending inventory levels.
What is the Production Budget?
A master budget is this type of tool, meaning it sets a target or benchmark to compare against actual performance.
What is a Control Tool?
This is the set of budgets that project future cash flows, sales, and production, culminating in projected financial statements.
What is the Master Budget?
This common investment rule states that a project is acceptable if its calculated value is greater than one.
What is the Profitability Index (PI)?
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What is Romeo and Juliet?
This financial budget is crucial for avoiding insolvency and details all expected cash inflows from collections and outflows for payments, often revealing a need for short-term financing.
What is the Cash-Flow Budget?
This characteristic means the sales budget affects the production budget, which affects the materials budget, and so on throughout the entire plan.
What is Interdependent?
This is the process of comparing actual results to the budgeted figures to identify and investigate differences.
What is Variance Analysis?
The rate that sets the Net Present Value of all a project's cash flows equal to zero.
What is the Internal Rate of Return (IRR)?
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What is gold?
This specific schedule calculates the cost of raw material that must be purchased during the period, using the formula: (Units to be Produced x Materials Required per Unit) + Desired Ending Materials Inventory - Beginning Materials Inventory.
What is the Direct Materials Purchases Budget?
This two-word phrase describes the financial statements a master budget produces, indicating they are forward-looking estimates rather than historical reports.
What are Pro Forma Statements?
This is the name for the projected financial statements (Income Statement, Balance Sheet) that are the final product of the master budget.
What are Pro Forma Financial Statements?
This analysis examines how changes in one key variable, like sales volume, affect a project's NPV or IRR.
What is Sensitivity Analysis?
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Who is Claude Monet?
This final pro-forma statement of the master budget is prepared last because it requires data from nearly every other budget, including the budgeted net income figure and the ending cash balance.
What is the Budgeted Balance Sheet?
This is the ultimate purpose of a master budget; it's not just about counting numbers but about executing the company's high-level strategy for profit and growth.
What is Goal-Oriented?
This is the specific budgeting approach where the budget is started from a "zero base" each period and every expense must be justified, as opposed to simply adjusting the previous year's budget.
What is Zero-Based Budgeting (ZBB)?
This type of risk, unique to a specific project or company, can be mitigated through diversification within a firm's portfolio.
What is unsystematic risk?
Famous scientist who discover gravity.
Who is Isaac Newton?