Concept explainers
Use this list of terms to complete the sentences that follow.
Long-range plans | Participative budgeting |
Sales |
Operating budgets |
Financial budgets |
1. _____ establish goals for the company’s sales and production personnel.
2. The _____ is a set of interrelated budgets that constitutes a plan of action for a specified time period.
3. _____ reduces the risk of having unrealistic budgets.
4. _____ include the
5. The budget is formed within the framework of a _____.
6. _____ contain considerably less detail than budgets.
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- You are in the process of creating your department's projected operating budget. As you create this budget, you realize that you are very uncertain about the volume of services you will be providing in the future. What tool(s) can you use to understand the impact of that uncertainty on your budget? O A. Ratio analysis O B. Varlance analysis O C. None of these O D. Sensitivity analysis O E. Scenario analysisarrow_forwardA company can expect to receive which of the following benefits when it starts its budgeting process? a. The budget provides managers with a benchmark against which to compare actual results for performance evaluation. b. The planning required to develop the budget helps managers foresee and avoid potential problems before they occur. c. The budget helps motivate employees to achieve sales growth and cost-reduction goals. d. All of the abovearrow_forwardR4 Assignment Saved Outdoor Outfitters has created a flexible budget for the 70,000-unit and the 80,000-unit levels of activity shown as follows. Complete Outdoor Outfitters's flexible budget at the 107,000-unit level of activity. Assume that the cost of goods sold and variable operating expenses vary directly with sales and that income taxes remain at 30 percent of operating income. 70,000 Units 80,000 Units 107,000 Units $ 1,400,000 $ 1,600,000 960,000 Sales Ask Cost of goods sold 840,000 Gross profit on sales 2$ 560,000 $ 640,000 Operating expenses ($90,000 fixed) 370,000 190,000 $ 410,000 Operating income Income taxes (30% of operating income) 230,000 57,000 69,000 Net income 133,000 $ 161,000 Mc Graw Hillarrow_forward
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- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College