ACCT 1A Lecture Notes - Lecture 13: Decision-Making
15 Jun 2020
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Document Summary
Budget: plans dealing with the acquisition and use of resources over a specified time period. It is much more than a number crunching exercise. It is a management task that requires a great deal. Zero based budget: requires managers to build budgets from the ground up each year (rather than just add a percentage increase to last year"s number). Rolling budget: continually updated to add a new budget period as the most recent budget is completed. The annual budget is prepared for the full year ahead. Rolling budgets are a series of short term budgets that are updated periodically. Participatory budget: a budgeting process that starts with departmental managers and flows up through middle management and then to top management. Each new level of management has responsibility for reviewing and negotiating only changes in the proposed budget. Manufacturing overhead budget: used to project the dollar amount of manufacturing overhead needed for production.
