Budgeting and Forecasting

There are costs incurred in the dad to day operations of all businesses and organizations. These costs are known as operation expenses and operating costs.

Cost volume profit analysis is useful in some applications. It is limited however, when it comes to operations which have more than one product. In addition, it can only produce approximate answers.Ê

The main difference between consolidated and parent entities is that consolidated financial statements show the activities of the parent company and all of its subsidiaries. A stand alone, or parent financial statement, treats each subsidiary as a a separate entity.

The impact of incorrect information on operations in the market place and profitability include possible loss due to poor forecasting. Incorrect information may also eventually lead to bankruptcy since planning, controlling and monitoring processes will also be affected adversely.

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Its classed as an estimation of the revenue and expenses over a specified future period of time

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to calculate the profit easilly

All assumptions executed you will end up with an inbalance between your equities, total assets, and liabilities. And when you compute total assets - liabilities - equity you evaluate either a negative number or a positive number. This number is your discretionary funds needed or discretionary funds available. From this you would need to determine whether you should increase you debt or increase your retained earnings or increase your dividend payout, pay down your debt. Depends what the direction of the company will be in the near or distant future. Once you decide which route to follow make adjustments so that the balance sheet will be more balanced at the full execution of the pro forma.

2 years

Companies allocate costs so that all elements that are part of that cost share the incurred costs. It is like spreading the costs amongst those that use it. Companies allocate costs merely to assign responsibility of those costs to either several departments within that company or to just one department. For example, think of a multi-divisional business that has to provide a security service to protect its building, all divisions in that business will share the costs of the security service.

Financial accounting refers to the branch that prepared financial reports (known as financial statements) that are for general use. Primarily however, they are prepared for external users (owners, investors, government, suppliers, creditors). The goal of financial accounting is to provide financial statements that follow generally accepted accounting standards or GAAP.

Cost accounting is the branch that focuses on manufacturing costs, i.e. direct materials, direct labor, and factory overhead. It is often considered part of management accounting, the branch that provides information for internal purposes and focuses on helping management make decisions instead of strictly complying with GAAP. Cost accounting deals with manufacturing concerns.

· More time consuming to collect data · Cost of buying, implementing and maintaining activity based system · Makes waste visible which some executives and managers don't want their boss to see * It may be difficult to set up and establish, particularly if an organisation is using more traditional accounting methodologies. (barriers to change) * Can be time consuming if all activities are to be costed * May provide too much detail - obscuring the bigger picture.

The advantages are that you will be able to get more things for the business. The disadvantages are that they are a lot of costs.

The system of inventory where updates are made on a periodic basis is a periodic inventory. In this type of inventory, there is no effort made to keep the records of the cost of goods sold or the inventory up-to-date.

There would be many variables to your question. Such as, rookie or officer, experience and the list goes on.

3

People leak disclosed financial information about the businesses

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Trade unions are organizations made up of workers and their representatives that negotiate with employers for pay, benefits, work conditions, and schedules.

• Fixed expenses include rent or mortgage payments,
• depreciation on fixed assets (such as cars and office equipment),
• salaries and associated payroll costs, liability and other insurance, utilities, membership dues and subscriptions(which can sometimes be affected by sales volume),
• and legal and accounting costs.
• These expenses don't change, regardless of whether a company's revenue goes up or down.

Smoothing does not necessarily solve a conflict. It may create a feeling that the conflict is not as severe as it has been perceived to be or may provide a "cooling off" period but the confict remains unresolved.

ratio analysis is important for the following reasons:

MRP creates recommendation for purchase orders and production orders based on some inputs such as Purchase Orders, Sales Orders, Inventory Status, Forecast, Bill of Material, Lead time, Minimum Order quantity, Parent dependent requirement, Parent Production Order, etc.