______________ 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 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) =
(Cost of Goods Sold) + (Ending Inventory) - (Beginning Inventory) =
(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) =
Cost of Goods Sold + Target Ending Inventory =
Total Inventory Required
Total Inventory Required - Beginning Inventory =
In a _______ center, managers are accountable for costs (expenses) only.
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.
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.
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 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.
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.
The manager of a car service station is evaluated based on the station's revenues and expenses.
Burpee.com's investor relations Web site provides operating and financial information to investors and other interested parties.
The shopping section of Burpee.com reports both revenues and expenses.
The personnel department of USAA Life Insurance Company prepares its budget and subsequent performance report othe basis of its expected expenses for the year.
Pace Foods is a subsidiary of Campbell Soup Company
The bakery department of an Albertson's supermarket reports income for the current year.