Budgeting and Forecasting Flashcards Preview

Management Information > Budgeting and Forecasting > Flashcards

Flashcards in Budgeting and Forecasting Deck (21)
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1
Q

Forecast

A

reduction of what is likely to happen

2
Q

Budget

A

Quantified plan of action

3
Q

Principle budget factor

A

Factor which limits an organisations activities, usually sales demand

4
Q

Master budget

A

consolidation of all the subsidiary budgets, includes:

a) budgeted IS
b) Budgeted BS
c) Cash budget

5
Q

Sensitivity analysis

A

Sensitivity of budgets to changes in a assumptions a.k.a. ‘What if’ analysis

6
Q

High-low method

A

Use when semi-variable cost

7
Q

Total costs: Formula

A

FC + (VC per unit x output)

8
Q

Linear regression analysis

A

~ technique for establishing a straight line equation

~ takes into account all data sets

9
Q

Correlation

A

Degree to which one variable is related to another

10
Q

R=-1

R=1

A
1= as one increase, so does the other
-1= as one increase, the other decreases
11
Q

Coefficient of determination

A

r^2
amount of one change that CAN BE EXPLAINED BY another change
! BEAWARE ! not ‘caused by’

12
Q

Big data

A

concerns high-volume, high velocity and high-variety information assets and is used to identify trends

13
Q

Big data analytics

A

identify storage, relationships, patterns and other correlations

14
Q

Imposed budgeting

A

a.k.a. top-down

top management prep budget w/ no input from operating personnel

15
Q

Participative budgeting

A

a.k.a. bottom-up

budgets developed by lower-level mgt and submitted to seniors mgt

16
Q

Incremental budgeting

A

base next year on CY’s results but modified for changes in activity levels to pricing

17
Q

Zero based budgeting

A

each budget should be prepared from the very beginning or zero

18
Q

Rolling budgeting

A

a.k.a. continuous budgeting

budgets prepared every 1/2/3m for 12m and extend current budget

19
Q

Product-based budgeting

A

separate budget for each product

20
Q

Responsibility based budgeting

A

separate budgets for each area of responsibility

21
Q

Activity based budgeting

A

based on a framework of activities and cost drivers