The use of budgets in controlling operations and takes place by means of budget reports which compare actual results with planned objectives.
What is known as budgetary control?
100
Compares actual results with budget data at the activity level used in the master budget
What is static budget report?
100
Budgetary process more useful if it is adaptable to changes in operating conditions.
What is the flexible budget?
100
Accumulating and reporting costs on the basis of the manager who has the authority to make day to day decisions
What is responsibility accounting?
100
Focus is maximizing net income.
What is a for profit entity?
200
1. Develop the planned objectives
2. analyze differences between actual and budgeted results
3. Take corrective action.
4. Modify future plans, if necessary.
What are the steps in budgetary control?
200
Evaluating a manager's effectiveness in controlling cost when actual level of activity closely approximates master budget activity level
What is the use of a static budget?
200
These amounts increase proportionately with production
What is budgeted variable amounts?
200
Department Managers, Division managers, President
What are levels of responsibility for controlling costs.
200
Cost incurred indirectly and allocated to a responsibility level
What are non-controllable costs?
300
It is derived from the sales forecast and it represents management's best estimate of sales. Thus is a useful basis for evaluating sales performance.
What is the sales budget?
300
The words used to sometimes describe the difference between budget and actual
What is called a budget variance?
300
Identify the activity index and the relevant range of activity, the variable costs and determine the budgeted amount for each cost.
What are steps in developing the flexible budget?
300
The control of operations is delegated to many managers throughout the organization.
What is decentralization?
300
Management function that compares actual results with budget goals. Included both behavioral and reporting principles.
What are the principles of performance evaluations?
400
Identifies the name of the budget, states the frequency of the report, specifies the purpose of the report, and indicates the primary recipient(s) of the report
What is a formalized reporting system?
400
A feature included in the 2nd quarter of a static report and not included the 1st quarter
What is cumulative year-to-date information?
400
Two sections of the flexible budget
What is the production data and the cost data?
400
Sometimes used to identify an area of responsibility in decentralized operations
What is a segment?
400
Top management's review of a budget report is focused primarily on differences between actual results and planned objectives.
What is management by exception?
500
A production manager in a manufacturing company would most likely receive a
What is a scrap report?
500
Top management's reaction to unfavorable differences is often influenced by the __________ of the difference.
What is the materiality (significance)?
500
These cost do not change in total as activity changes,
What is fixed cost?
500
1. A distinction is made between controllable and noncontrollable items.
2. Performance reports either emphasize or include only items controllable by the individual manager.
What is how responsibility accounting differs from budgeting?