COMM 294 Lecture Notes - Lecture 16: Budget, Financial Statement, Income Statement
Document Summary
Comm 294, budgeting (chapter 9) The basic framework of budgeting. Wk08- 1 may be nancial (how much money) or non- nancial (how many units). quantify your goalsmake your cash ow and nd your bottleneckyour budget tells you how many units should buy this monththe basic framework of budgeting. Responsible for the revenue of a unit. e. g. paint department in an automobile plant e. g. reservations department of an airline. !segment!has!control!over!both! costs!and!revenues. e. g. company-owned restaurant in a fast-food chain. The annual operating budget may be divided into quarterly. Segment has control over profits and invested capital. e. g. division of a large corporation. 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed. Participative budgets should be reviewed by higher levels of management to prevent budgetary slack . Budgetary slack = difference between what the manager thinks can actually be achieved vs. amounts included in the budget. May be preferred when .
