1 Is depreciation expense considered in the cash budget?
no
2 What is included in the cash budget?
Cash collections and dispersions
3 What financial statement does the operating budget emphasize?
Income statement
4 In what order are budgets prepared when developing the operating budget
Sales, production, operating, net income
5 What is included in the financial budget?
Capital expenditure, budget and cash budget
6 What is a rolling budget?
It changes constantly there’s no end
7 When making a discontinuation decision, what all must be considered
Does contribution margin outweigh fixed cost and do you have something to do with the open availability?
8 When should a company decide to process further
if the income revenue is greater than the income cost
9 What are the characteristics of price takers?
Hi volume low cost
10 what are the characteristics of price setters?
Low volume high cost
11 What is target costing?
Profit wanted minus market price
12 Who would use target costing?
Price takers
13 What must be considered when evaluating a special order decision
if they have the capacity, if it will cover cost
14 How are fall fixed cost a valuated, when making a special order decision
if fixed costs stay ignore them
15 What are the advantages of participatory budgeting?
A lot of buy in
16 What is the disadvantage of participatory budgeting?
Not effective
17 What are the advantages of authoritative budget?
Affective
18 What is the disadvantage of authoritative budget?
Not a lot of buy in
19 What characteristics define information as relevant?
Occur in the future, differ among alternatives, be critical, the short term decision making
20 What is the contribution margin income statement?
sales- vc=cm-fc=opp inc
21 What is the financial income statement?
sales-cogs=gross profit- opp exp= opp inc
22 How is the contribution margin income statement different from the financial reporting of the income statement?
Contribution margin focuses on cost behavior, and the financial focuses on cost classification
23 Text cost that can be avoided are generally deemed
Relevant
24 Fixed cost that cannot be avoided, are generally deemed
Irrelevant
25 What is an opportunity cost?
Profit lost when 1 alternative is picked over another
26 What are sunk cost?
cost incurred in the past that can’t be changed