Chapter 10 - The Master Budget & Responsibility Accounting
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31 terms
Terms | Definitions |
|---|---|
 ______________ is the cornerstone (or most critical element) of the master budget? | The Sales Budget |
| The income statement is part of which element of Amazon.com's master budget? | The Operating Budget |
| (Sales Price per Unit) x (Expected # of Units to be Sold) = | Budgeted Sales |
| (Budgeted Total Sales) x (Variable Cost %) = | Cost of Goods Sold |
| (Sales Price per Unit) x (Variable Cost %) x (Units Sold Per Day) (Days Sales in Ending Inventory) = | Ending Inventory |
| (Cost of Goods Sold) + (Ending Inventory) - (Beginning Inventory) = | Budgeted Purchases |
| (Sales) - (Cost of Goods Sold) - (Operating Expenses) = | Budgeted Operating Income |
| Which two expenses would NOT appear in a cash budget? | Depreciation & Insurance Expense |
| What manager is at the highest level of the organization? | Investment center manager |
| Beginning Inventory = | "Desired ending inventory for prior month" |
| (Beginning Inventory) + (Purchases) - (Ending Inventory) = | Cost of Goods Sold |
| (Total sales) x (% of credit sales) x (% collected) = | Cash Collected |
| Cost of Goods Sold + Target Ending Inventory = | Total Inventory Required |
| Total Inventory Required - Beginning Inventory = | Purchases |
| In a _______ center, managers are accountable for costs (expenses) only. | cost |
| The plant manager evaluates the supervisor on his or her ability to control costs by comparing actual costs to budgeted costs. | The supervisor is not responsible for generating revenues because he or she is not involved in selling the product. |
| In a _______ center, managers are accountable primarily for revenues. | revenue. |
| Mangers of revenue centers may also be responsible for the costs of their own sales operations. | ex. Midwest & Southeast sales regions of business. |
| Revenue center performance reports compare ______ with budgeted revenues and may include the costs incurred by the revenue center itself | actual with budgeted revenues. |
| In a ______ center, managers are accountable for both revenues and costs (expenses) and, therefore, profits. | profit. |
| Superiors evaluate the managers performance by comparing _______ revenues, __________, and _______ to the budget. | actual revenues, expenses, and profits |
| In an __________ center, managers are accountable for investments, revenues, and costs (expenses). | Investment |
| Investment centers are generally large divisions of a corporation | Managers of investment centers are responsible for: 1. generating sales 2. controlling expenses 3. managing the amount of investment (assets) required to earn the income. |
| The manager of the Southwest sales territory is evaluated based on a comparison of current period sales against budgeted sales. | Revenue Center |
| A charter airline records revenues and expenses for each airplane each month. The airplane's performance report shows its ration of operating income to average book value. | Investment Center |
| The manager of a car service station is evaluated based on the station's revenues and expenses. | Profit Center |
| Burpee.com's investor relations Web site provides operating and financial information to investors and other interested parties. | Cost Center |
| The shopping section of Burpee.com reports both revenues and expenses. | Profit Center |
| The personnel department of USAA Life Insurance Company prepares its budget and subsequent performance report othe basis of its expected expenses for the year. | Cost Center |
| Pace Foods is a subsidiary of Campbell Soup Company | Investment Center |
| The bakery department of an Albertson's supermarket reports income for the current year. | Profit Center |
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