Objectives: Chapter Twenty-One
The following learning objectives for this chapter map to the curriculum design for our online university-level courses. These courses are offered through Utah State University, and result in the awarding of up to 6 hours of highly transferrable college credit. To learn more, check out the classroom link.
The importance and use of budgets within an organization.
Define the term "budget."
Cite the benefits of the budgeting process.
The budget process and the impact of human behavior.
Who ordinarily serves on a budget committee and what roles does this group play
Distinguish between the mandated top-down and participative bottom-up budget construction processes.
Discuss the nature of budgetary slack.
How does the form of organizational structure influence business budgeting, planning, and information flow?.
Distinguish between incremental and zero-based budgeting approaches.
Generally describe potential human behavior and ethical aspects of budgeting.
The various components of a master budget.
Cite the components typically included in a master budget.
What should be the starting point for budget preparation?
What is the advantage of an electronic spreadsheet in the budgeting process?
Understand and be able to prepare a sales budget, production budget, direct materials purchases budget, direct labor budget, factory overhead budget, selling and administrative expense budget, cash budget, and budgeted income statement and balance sheet.
Define the term "pro forma."
Understand why it is important to control external distribution of budgetary information.
Budget periods and budget adjustments.
Distinguish between monthly, quarterly, and annual budgets.
What is a continuous budget?
What is a flexible budget and what are the advantages of such budgets?
What is an encumbrance and what control purpose does it serve?