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Budgeting in Management Accounting

Budgeting in Management Accounting

Assessment

Flashcard

Business

9th Grade

Practice Problem

Hard

Created by

Lyndsay Kavanagh

FREE Resource

Student preview

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9 questions

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1.

FLASHCARD QUESTION

Front

What is a budget?

Back

A budget is a statement of future expectations expressed in physical units or financially, prepared to estimate and control the activities of a firm to achieve a previously agreed objective.

2.

FLASHCARD QUESTION

Front

What are the main purposes of budgets?

Back

Budgets provide realistic estimates of income and costs, monitor organizational performance, provide a financial position statement, coordinate plans, control activities, and set performance targets.

3.

FLASHCARD QUESTION

Front

What is a production budget?

Back

A production budget calculates production volume, showing the number of units to be made to meet sales volume.

4.

FLASHCARD QUESTION

Front

What is a cash budget?

Back

A cash budget estimates receipts and payments for a period, showing when there is a surplus or shortage of funds, aiding decision-making and target setting.

5.

FLASHCARD QUESTION

Front

What is a sales budget?

Back

A sales budget estimates future sales figures by product/area, providing targets for motivating staff and forming the basis for other budgets.

6.

FLASHCARD QUESTION

Front

What factors influence sales budgets?

Back

Sales budgets are influenced by external factors such as government policies, hire purchase restrictions, changes in fashion, and competition.

7.

FLASHCARD QUESTION

Front

What does a production budget consider?

Back

A production budget considers material costs, labor costs, factory overheads, raw material shortages, labor availability, machinery breakdowns, and storage space.

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