Budgetary Planning
What is the most common length of the budget period?
One year
What is Return on Investment
The primary basis for evaluating the performance of a manager of investment center
______if the variance is due to inexperienced workers, faulty machinery, or carelessness, the production department is responsible for any variances.
Materials quantity variance
What are the two classes of budgets in managerial accounting?
Operating budgets and financial budgets
Total budgeted costs equation
Fixed costs + variable costs
____ are common in business and represent predetermined unit costs, which companies use as measures of performance.
Standard Costs
Participative budgeting is a _____to______ approach
Bottom to top
The 3 types of responsibility centers
Cost center, profit center & investment center
Materials Variance + Labor Variance + Overhead
Variance=
Total Variance
In Learning Objective 2, which type of budget is prepared first?
Sales budget
2 sections in flexible budget reports
Production data & cost data
1.Actual costs < Standard costs =
2. Actual costs > Standard costs =
1.Favorable variance
2.Unfavorable variance
State the equation for cost of direct materials purchases
Direct materials units to be purchased x cost per direct materials unit = cost of direct materials purchases
2 ways to improve ROI
Decrease variable and fixed costs by 10 % or increase sales by 10%
What is the purpose of using a balanced scorecard in performance management?
The balanced scorecard is used to evaluate a company's performance from multiple perspectives, such as financial, customer, internal processes, and learning and growth.