Term
| 3 types of budgets in the master budget |
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Definition
1. operating 2. capital expenditures budget 3. financial budget |
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Term
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Definition
| planning, coordination/communication, benchmarking |
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Term
| components of operating budget |
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Definition
| sales budget also inventory budget -> purchases and COGS -> operating expenses -> budgeted income statement |
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Term
| what does capital expenditures budget consist of? |
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Definition
| company's plan for puchasing property, plant, equipment (PPE) and other long term assets |
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Term
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Definition
consists of cash budget -> budgeted balance sheet -> budgeted statement of cash flows cash budget comes from capital expenditures budget + information budgeted income statement + cash flow plans |
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Term
| what is a responsibility center |
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Definition
| a part or subunit of an organization whose manager is accountable for specific activities |
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Term
| 4 types of responsibility centers |
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Definition
| cost center, revenue center, profit center, investment center |
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Term
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Definition
managers are accountable for costs (expenses) only such as manufacturing operations (not responsible for generating revenues) |
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Term
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Definition
managers are primarily accountable for revenues manager also responsible for costs of their own sales operations |
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Term
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Definition
managers are accountable for both revnues and costs, and therefore profits a higher level management posiition - typically responsible for a whole product line |
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Term
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Definition
mnagers are accountable for investments, revenues, and costs ex. saturn division of general motors or sauces and beverages division of campbell soup responsible for 1) generating sales 2) controlling expenses 3)managing investment |
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