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Budgeting and Forecasting
Budgeting and forecasting are business processes essential to a company’s operations. Budgeting involves planning for revenues and expenses. Forecasting is a method of predicting trends based on historical and current events.
1,416 Questions
How do you do the factory budget?
Budgeting and forecasting are business processes essential to a company's operations. Budgeting involves planning for revenues and expenses. Forecasting is a method of predicting trends based on historical and current.
Tungkulin ng department of budget and management?
Sila ang tumutulong upang magkaroon ng pondo dito sa ating pamayanan/pamahalaan?
What is a good method of increasing income so that it covers all the expenses in a budget?
getting another job or working overtime
What is computerized budgeting?
Using the computer and information systems to input budget data for easy soft copy retrieval
Why do budgets need frequent reviews and adjustment?
When a budget is compiled its based on information at the time of creation and the income/expenditure that a company will undertake normally for the nest trading year. These are assumptions. If during the trading period unforeseen expenditure is forced on accompany, if income drops to unexpected levels (i.e. a customer becomes bankrupt owing money) the there will need to be changes made to the budget to account for this. By reviewing the budget against the business one a monthly or at least bimonthly period changes to forecast can be made in a timely manner and buffer the company. The intention is to minimise the impact of the budget becoming uncontrollable and losing the company profits.
The other reason for review is to identify areas where spend is required to take place i.e. purchasing new machinery, investing in a new product. Where budgets are not used companies will recover that amount back into the profit margin and in the following year reduce the allocation to that department.
zero-based budget
1st quarter
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Cost of case divided by number of units.
For example you bought a dozen eggs for $ 24..
what is the unit price per egg?
$24 / 12 = $2 per egg.
or say you are calculating the cost of manufacturing 1 unit..
given: the cost of manufacturing 2000 units of product ABC is as follow, find unit price?
Total material cost $ 5000
Total labour cost $ 4000
Other expenses $ 1000
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total cost of manufacturing $ 10000
solution: Total Cost/ no. of unit manufactured
10000/2000 = $5 per unit
How is bad debt treated in the preparation of cash budget?
Bad debt from creditors is not included in cash outflow of a cash budget. It is treated at a receipt that has not been collected.
Advantages and disadvantages of budgetary slack?
Advantages:
 It provides flexibility for operating under unknown circumstances, such as
an extra margin for discretionary expenses in case budget assumptions on
inflation are incorrect or adverse circumstances arise.
 Additional slack may be included to offset the costly setups from design
changes and/or small lot size orders.
 The increased pressure to meet current year earnings per share targets may
result in postponing expenditures into the next year or aggressively pulling
sales into the current year. Budgetary slack in the next year may compensate
for shifting those earnings from next year into the current year.
Disadvantages:
 It decreases the ability to highlight weaknesses and take timely corrective
actions on problem areas.
 It decreases the overall effectiveness of corporate planning. Actions such as
pricing changes or reduced promotional spending may be taken from a
perceived need to improve earnings when eliminating the budgetary slack
could accomplish the same objective without marketplace changes.
 It limits the objective evaluation of departmental managers and
performance of subordinates by using budgetary information
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This is the Reed family budget. What percent of the expenses are spent on gifts and donations?
I am unable to se the budget, therefore I cannot tell the percent of the expenses that are spent on gifts and donations.
What situations would implications of a budget be demotivating to staff?
Implications of a budget can be demotivating to staff when it leads to cuts in resources, resulting in increased workloads without additional compensation or support. Tight budget constraints may also limit opportunities for professional development, bonuses, or promotions, causing employees to feel undervalued. Additionally, if budget limitations lead to a lack of innovation or stagnation in projects, employees may feel their contributions are not recognized or impactful. Overall, a budget that prioritizes cost-cutting over employee well-being can significantly affect morale and motivation.
Advantages and disadvantages of kaizen costing?
An advantage to kaizen is the fact that businesses can improve one process at a time. A disadvantage is the fact that during the process of improving things may slow down.
What is the sequence of steps in preparing the national budget?
The executive branch writes a preliminary budget proposal.
Congress decides on the details of the budget.
The president signs the completed budget into law.
What results when expenditures exceed revenue?
A deficit is the result when expenditure exceeds revenue.
Explain how return on assets decline given an increase in net profit margin?
If you look at what Return on Assets is comprised of, Net Profit Margin and the Total Asset Turnover, if the firm is having a very slow turnover, the ROA will be declining if the turnover is greater in magnitude to the NPM.
3 What are the four benefits of ICT to a business organization?
Its faster..
Data can be kept up-to-date
Easy to set up
A functional budget is a budget which relates to any of the functions of an undertaking. E.G. sales, production, research, development..
