Master Budgets and Performance Planning

Flashcards covering key concepts related to master budgets and performance planning in financial and managerial accounting.

Budgeting

The process of planning future business actions and expressing them as formal plans.

Budget

A formal statement of a company’s plans in dollars.

Budgetary Control Process

Management’s use of budgets to ensure that planned objectives are met.

Continuous Budgeting

Preparing rolling budgets that are continually revised as time passes.

Production Budget

A budget that shows the number of units to be produced in a period based on projected unit sales.

Direct Materials Budget

A budget that shows the budgeted costs for the direct materials needed for production.

Direct Labor Budget

A budget showing the estimated costs for direct labor needed to satisfy production for a given period.

Factory Overhead Budget

A budget showing the budgeted costs for factory overhead required to complete estimated production.

Cost of Goods Sold Budget

A budget that estimates the cost incurred by a company in producing its goods.

Capital Expenditures Budget

A budget that reports expected cash receipts and cash payments related to the sale and purchase of plant assets.

Cash Budget

A budget that shows budgeted cash receipts and cash payments during the budget period.

Merchandise Purchases Budget

A budget prepared by a merchandiser, indicating the amount of merchandise to be purchased.

General and Administrative Expense Budget

A budget reporting expenses expected during the budget period, including administrative salaries.