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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
List three factors that affect budget resource allocation decisions of managers provide appropriate examples for each of these three factors?
Completing and submitting the next fiscal year's budget execution plan (EP), finalizing the second tri-annual review (TAR), and completing the mid-year review typically occur in the second quarter of the fiscal year. This timeline aligns with the standard financial planning and review processes within many organizations.
What are the linkages of recurrent and capital budgeting?
Recurrent budgeting refers to the allocation of funds for ongoing operational expenses, such as salaries, utilities, and maintenance, while capital budgeting focuses on long-term investments in physical assets, like buildings and equipment. The linkages between the two involve ensuring that capital investments are sustainable through appropriate recurrent funding; for instance, new machinery may require additional maintenance costs. Effective capital budgeting can lead to increased efficiency and reduced recurrent costs, creating a cycle where investments enhance operational performance. Additionally, decisions made in recurrent budgeting can impact the availability of funds for future capital projects.
How do I make a financial budget for my family?
I recommend the "zero based budget". This is where every single dollar that comes in during the month is already allocated. Dave Ramsey allocates the use of this budget, he describes it as "a plan for every penny".
FMA
How do you calculate unit product cost?
To calculate the unit product cost, you need to sum the total costs associated with producing a product, which typically includes direct materials, direct labor, and manufacturing overhead. Divide the total production costs by the number of units produced to determine the cost per unit. This formula helps businesses assess profitability and set pricing strategies.
The US Federal fiscal year starts October 1 of one year and runs until the end of September the following year. For example: US Federal FY 2017 started on 1 October 2016 and ends on 30 September 2017.Budgets are established such that Money received during that period is counted as income for that period and money allocated for that period can only be spent during that period. There are, of course, instances where money is allocated during one fiscal year and then banked for use over a longer period extending past the end of the fiscal year.
State governments and many private companies will align their fiscal years with that of the Federal government, but some will choose other beginning and ending dates. The most common alternative is to align the fiscal year with the calendar year.
What is the standard depreciation rate for a motor vehicle?
normally 20%. Which will take a 5 years depreciation for the vehicle to zero.
1. Breakeven point = fixed cost/ contribution margin ratio
contribution margin ratio: (sales - variable cost)/sales
Sales = 20000 * 40 = 800000
Less: Variable cost = 20000 * 10 = 200000
Contribution margin = 600000
Contribution margin ratio = 600000/800000 = .75
Breakeven point in dollars = 120000/.75 = $160000
breakeven point in units = 160000 / 40 = 4000
Activity based budgeting is a technique that focuses on costs of activities or cost drivers necessary for production and sales. Such an approach facilitates continuous improvement.
Conventional capital budgeting
Conventional: Based on or in accordance with general agreement
Capital budgeting is the planning process used to determine whether an organization's long term investments such as new machinery, replacement machinery, new plants, new products, and research development projects are worth pursuing. It is budget for major capital, or investment, expenditures.
How are debt collectors fees treated when preparing a cash budget?
Frequently they will be classed as professional fees similar to those for accounts and legal teams
What are the benefit of internal audit?
Good organisations will welcome internal audits as these will identify shortfalls and strengths before external audits do. This allows for corrections to be made which from a quality management perspective is a very positive reflection of the management and when the corrections are in place these can be tested and changes made to more from unacceptable to acceptable to best practice. many of the best organisation running ISO processes achieve good contracts because of their management of quality
