ALE chap 32

A process of setting and agreeing on financial targets by taking into account financial needs for different department of a business.

Direct labor costs:

Budgeted figures - $50,000

Actual figures - $ 75,000

Identify the variance value and whether this is favorable (F) or adverse (A) variance.

This budgeting approach allows manager to make adjustment to make comparison along the budgeting period based on actual output changes.

• Flow budgeting

• Minimal budgeting

• Flexible budgeting

• Borderline budgeting

Budget holders are given to any supervisory roles in the department as it is not a complex task.

• True

• False

Budgets are forecast established to helps different department manager understand their financial needs.

• True

• False

Calculation of the differences between budgets and actual figures and analysis of the reasons for such differences.

The individuals who are responsible for setting and meeting pre-set budgets are called

• Budget leader

• Budget holder

• Budget seeker

• Budget kiasu

Assuming there was favorable variance of fabric cost at $500, the actual expenditure this month was $ 1000. How much is the budget fabric costs?

Following are the possible reasons of adverse variance for revenue budgets except?

• units sold was lower than budgeted level

• high demand from customers

• economic downturn

• less promotional activities

A change from the budget that leads to lower than planned profit.