Module+7000+XI+Vocabulary

=XI. Module 7000 Vocabulary ldm =


 * 1. Budget committee** – a group of key people, usually upper management, who are responsible for all matters that arise in relation to the budget. This committee assists in budget preparation, reviews the budget, makes policies regarding the budget, approves the final budget, makes sure the budget matches the company’s strategic objectives, and monitors the performance of the organization to make sure it is in line with the budget.


 * 2. Budget director** – the person in an organization who is responsible for overseeing the budgeting process. This person is usually a controller or works directly under the controller and also works very closely with the budget committee.


 * 3. Master budget** –all of the individual department and activity budgets within an organization make up the master budget. Master budget can be divided into two sections: operating budgets and financial budgets.


 * 4. Operating budgets** – projections for all of the income generating activities within an organization, namely sales, production, and finished goods inventories. Operating budgets generally consist of several sub-budgets which can be pulled together to come up with a budgeted income statement.


 * 5. Financial budgets** – projections for all of the cash inflows and outflows in an organization. Financial budgets are also concerned with financial position and provide organizations with a budgeted balance sheet.


 * 6. Continuous (rolling) budget** – a budgeting plan that forces management to plan ahead by adding an additional month in the future every time a budgeted month passes. This enables companies to continuously look ahead and always have a 12 month budget on hand.


 * 7. Sales budget** – the projected number of sales for a product or service in the future. Sales projections are often based on historical information. The sales budget must be complete before any other budget can be created.


 * 8. Production budget** – the number of units that must be produced in order to satisfy the projected number of sales and the ending inventory requirements


 * 9. Direct materials purchases budget** – reveals the amount of raw material that needs to be purchased in order to satisfy the production budget and maintain adequate inventory.


 * 10. Direct labor budget** – estimates the amount of direct labor hours and direct labor costs needed to fulfill the budgeted production needs.


 * 11. Overhead budget** – shows the amount of overhead costs, both fixed and variable, that are required in manufacturing a product. Overhead costs may include rent for office space, utilities, employee salaries, etc.


 * 12. Ending finished goods inventory budget** – uses information from the production, direct materials purchases, direct labor, and overhead budgets to come up with a unit cost per item. This number is necessary to calculate the cost of goods sold and the carrying costs of unsold units which is needed for the balance sheet.


 * 13. Cost of goods sold**- calculates what it will cost to manufacture the number units that are expected to be sold.


 * 14. Marketing expense budget** – budget for costs associated with selling and distribution activities. Marketing expenses can be broken down into fixed and variable expenses. Marketing expenses may include sales commissions, distribution materials (advertising), salaries of marketing staff, depreciation of equipment, etc.


 * 15. Research and Development expense budget –** money budgeted to be devoted to a company’s research and development department


 * 16. Administrative expense budget** – financial allocations that are devoted to the day-to-day operations of an organization.


 * 17. Budgeted Income Statement** – provides an estimate of operating income.


 * References:**

1. Accounting for Management. (2011). Retrieved June 29, 2011, from http://www.accountingformanagement.com. 2. Hansen, D.R., & Mowen, M. M. (2011). //Cornerstones of Cost Accouting.// Mason, OH: South-Western, Cengage Learning. 3. Web Finance, Inc. (2011). Retrieved June 29, 2011 from www.businessdictionary.com.