ACC 241: Exam 3 Questions and Answers 100%
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Master Budget - ANSWER - - Used to communicate management's plans for the upcoming period
throughout the organization.
- Used to allocate a company's resources and coordinate its activities.
Budget Committee - ANSWER - Group of senior level managers responsible for developing budgeting
policies and overseeing the budget preparation process.
- President and VP in charge of sales, production, and purchasing.
Budget Order - ANSWER - 1. Sales
2. Production
3. Material, Labor, MOH
4. Ending Inventory
5. Selling Administrative Expenses
6. Cash
7. Income Statement and Balance Sheet
Rolling Budget - ANSWER - A budget that is continuously updated by adding months to the end of the
budgeting period.
Centralized - ANSWER - refers to an organizational structure where all major planning decisions are made
by top management.
Decentralized - ANSWER - a type of organizational structure in which daily operations and decision
making responsibilities are delegated by top management to middle and lower level managers within the
organization, allowing top management to focus more on major decisions.
, Financial Budget - ANSWER - Projects both the collection and payment of cash and forecast the
company's budgeted balance sheet.
Production Budget - ANSWER - Used to forecast how many units should be made to meet the sales
projections.
Zero Based Budgeting - ANSWER - When an organization builds its budgets from the ground up.
Strategic Planning - ANSWER - A process of setting long term goals that may extend several years into the
future.
Slack - ANSWER - When managers make room into their budgets to protect themselves against
unanticipated expenses or lower revenues.
Variance - ANSWER - The difference between actual and budgeted figures and is used to evaluate how
well the manager controlled operations during the period.
Safety Stock - ANSWER - Extra inventory of finished goods that is kept on hand in case demand is higher
than predicted or problems in the factory slow production.
Operating Budgets - ANSWER - sales budgets and productions budgets are examples of. . .
Participative Budgeting - ANSWER - budgeting process that begins with departmental managers and
flows up through middle management to top management.
Cost Center - ANSWER - Responsible for costs incurred but have no revenue responsibilities.
Attainable Standards - ANSWER - also known as practical standards, are based on currently attainable
conditions with allowances for normal levels of waste and inefficiency.
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