Budgeting for Better Performance Workbook

A plan that predicts the cash inflows and outflows of a business over a specific period.

A financial document that outlines the projected sales revenue of a business.

The most important budget that determines the level of activity for all other budgets.

The budget that emphasizes production output, usually based on projected sales demand.

A financial document that outlines the projected costs of producing goods or services.

The financial document that predicts the cash inflows and outflows of a business.

A financial document that outlines the capital expenditure plans of a business.

The budget that outlines the estimated financial income and expenditure of an organization.

A situation where a company can sell all it produces and still have demand for more.

A situation where a company aims to increase sales by selling more units.

A situation where a company has the ability to produce more goods than it currently does.

A situation where a company has limited access to funds, restricting their ability to grow or operate.

A priority for a company that relies on immediate cash inflows to cover existing debts.

The process of setting financial targets and plans for the future of a company or organization. Involves analyzing past performance, forecasting future needs, and allocating resources to achieve goals.

The practice of comparing actual performance against planned goals and taking corrective action to stay on track. It ensures that the budget is used effectively and efficiently.

Budgeting encourages communication between different departments and levels of management. It helps everyone understand the company's plans and how their individual roles contribute to the overall goals.

Budgeting fosters teamwork by aligning individual efforts towards common goals. When everyone understands the budget and their contribution, it promotes a collaborative approach.

The budgeting process requires careful consideration of future needs and challenges. It involves evaluating past performance and forecasting future trends to make informed decisions about resource allocation.

Budgeting helps to align different departments and their individual targets to contribute towards the overall financial objectives of the organization. This promotes a coordinated effort across the company.

A system of formal procedures that help managers think about the future and ensure that their actions align with the company's financial goals. It provides a framework for making informed decisions and tracking progress towards targets.

Evaluating performance against budget targets provides a benchmark for understanding the company's progress. If actual results deviate from the plan, managers can implement corrective actions to stay on track.

A budgeting approach that adjusts costs based on actual activity levels, allowing for more accurate analysis.

The difference between actual costs and costs predicted by a flexible budget for the actual activity level.

A flexible budget forecasts the cost of achieving a specific output level within a given range.

A flexible budget is used to compare actual costs to predicted costs for the same activity level at the end of a budgeting period.

The level of activity (e.g., units produced, patients treated) used to adjust a flexible budget.

Costs that remain unchanged despite changes in activity levels.

Costs that vary directly with changes in activity levels.

The amount of revenue generated from the actual sales achieved in a period.

A process used to monitor and control a budget to ensure that the organization achieves its financial goals.

A deviation between a budget and actual results.

A variance that occurs when the actual expenses are lower than the budgeted expenses.

A variance that occurs when the actual expenses are higher than the budgeted expenses.

Costs that can be directly controlled by a manager.

Costs a manager cannot directly influence.

A flexible budget adjusts to changes in activity levels.

The point at which total revenue equals total costs.

Comparing a performance against a previous performance, a target or another performer.

A performance measurement example is comparing your 100-meter run time to your previous attempts.

A performance measurement example is comparing your 100-meter run time against your target of 12 seconds.

A performance measurement example is comparing your 100-meter run time to the times of other runners.

A measurement of a performance against a standard.

A performance measure can be 'below average' based on past performance or 'second out of eight' comparing to other performers.

Performance measurement can be used to assess individual, team or organizational performance.

Knowing how well something performs compared to others can help determine its effectiveness and provide valuable insight for decision-making.