Short-Term Budgeting Overview

A group of high-level executives responsible for guiding and overseeing the budgetary process.

A document outlining the structure, processes, and timelines involved in creating and executing the budget.

A schedule that lays out the steps and deadlines for developing and finalizing the budget. It ensures all departments contribute their information on time.

The person responsible for leading and directing the Budget Committee and managing the overall budgetary process.

An expectation that top executives are committed to achieving organizational goals. They should act as owners of the objectives, not just employees.

The process of educating employees about the importance, structure, and procedures of the budgetary system. This helps them understand how their work contributes to the overall financial plan.

A crucial aspect of effective budget committees. Transparency and open communication allow for collaboration, problem-solving, and effective decision-making.

The Budget Committee plays a critical role in helping organizations achieve their financial goals by providing a framework for planning, coordination, and decision-making.

A financial plan that outlines an organization's expected income and expenses for a specific period, typically a year.

A budget that focuses on the revenue and costs associated with the core operations of a business.

A budget that focuses on the financial health of a company, including cash flow and funding.

A budget that outlines the planned investments in long-term assets, such as equipment and property.

A budget that projects the revenue the company expects to generate from sales during a specific period.

A budget that outlines the costs associated with producing the goods or services the company sells.

A budget that projects the expenses incurred in supporting the company's operations, such as marketing, administration, and research and development.

A budget that outlines how the company plans to obtain and use its financial resources.

The minimum amount of cash a company wants to keep on hand to cover its day-to-day operations.

The difference between the desired minimum cash balance and the actual cash balance before financing.

The process of borrowing money to meet the cash need.

The excess cash left over after meeting the minimum cash balance requirements.

Involves paying back borrowed amounts using excess cash.

A method of allocating a portion of a company's total purchase cost to each accounting period that the goods are sold.

The total value of purchases made in a specific period.

The total amount paid to suppliers for purchases made in a specific period.

The amount paid to suppliers in the same quarter the purchases are made, a percentage reflecting the amount of the total purchase cost.

The amount paid to suppliers in the quarter following the purchase, a percentage of the total purchase cost.

A discount offered to customers for paying their bills within a specific period.

The number of direct labor hours needed to produce one unit of output.

A cost accounting method used to allocate indirect costs to production.

A financial plan that outlines the expected cash inflows and outflows over a specific period, typically a year.

The portion of a company's income statement that represents revenue generated from non-core activities.

Income earned in the current period but not yet received.

Income received but not yet earned because the service or product will be delivered in the future.

The specific point in time when cash is actually collected from customers.

Cash flows from the purchase and sale of long-term assets, such as property, plant, and equipment.

Cash flows from the operations of a business, such as revenue earned and expenses paid.

A line of credit that allows a business to borrow money quickly when needed.

The sum of direct materials used in production, plus the ending inventory, minus the beginning inventory. This calculation determines the required purchases of raw materials for a specific period.

The estimated cost of direct materials to be used in production, based on the projected production level and the standard amount of materials needed per unit.

It's the amount of direct materials that needs to be purchased to meet production needs, considering beginning and ending inventory levels.

The total hours of direct labor required for production, based on the projected output and the standard time per unit.

The estimated cost of direct labor for a specific period, calculated by multiplying the budgeted direct labor hours by the standard direct labor rate per hour.

A type of factory overhead cost that remains constant in total, regardless of the production volume. It's typically allocated based on normal production capacity.

A type of factory overhead cost that changes in total based on the level of production. The cost per unit remains constant.

The estimated costs for a specific period associated with factory overhead. It includes both fixed and variable overhead components.