1. Why do organizations create budgets
2. Budgets are used for two key purposes. List and describe them.
3. The purpose of comparing budgets to actual results is for what purpose
4. Describe the advantages to budgeting. Which do you believe is the strongest advantage Why
5. Explain the basic premise of responsibility accounting.
6. Discuss full and interim budgeting periods.
7. What is the importance of a participative budget? How can self-imposed budgets lead to budgetary slack.
8. How is budgeting influenced by psychology?
9. The master budget contains ten schedules. List each and state the estimates that are needed for each.
10. The production budget directly influences which budgets?
11. The cash budget is directly influenced by which budgets?
12. What is the importance of a sales budget and cash budget?
13. Describe the calculation for determining Total Sales.
14. Explain the procedure for estimating cash collections for any given period.
15. State the purpose of the production budget. Explain how production needs are determined.
16. What purpose does the direct materials budget play in a manufacturing firm? What estimated balances does it provide management.
17. Show the formula to determine: 1) units for direct materials to be purchased, and 2) cost of raw materials to be purchased.
18. Explain the importance of information gained from the creation of a direct materials budget in terms of labor force needs.
19. What is the procedure for calculating direct labor hours and cost?
20. List and describe the four key sections of the cash budget.
21. When is it required for a company to borrow cash? How does it determine if borrowing is necessary? At what point would a company want to repay monies borrowed?
22. What are the sources of information needed to prepare budgeted income statement?