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D099 Module 11
Budgeting & Planning
| Question | Answer |
|---|---|
| Master budget | Consists of financial budgets, such as the balance sheet and cash budgets, and its operating budgets, which include the income statement developed from sales and production forecasts |
| Sales budget | Considers numbers sold, expected budgeted price, and values of sales |
| Administrative budget | Determined by looking at functions such as office expenses, office rent, research and development costs, and legal costs |
| Production budget | Determines how much money is needed for production by using the sales forecast, required number of units for inventory, and the units in inventory |
| Outsourcing | Occurs when a business hires a third party to perform some of its tasks, such as production, customer service, and marketing |
| Freelancing | Happens when a self-employed person performs work for a business |
| Downsizing | Occurs when a business reduces the size of its workforce |
| Costing | Occurs when the cost of performing an element of business is assigned |
| Activity-based costing | A costing method that first assigns costs to activities, then assigns costs to products based on their consumption of activities |
| Cost driver | A cost driver is an activity or transaction that causes costs to be incurred |
| Activity center | An activity center is a unit of the organization that performs some activity |
| Aggressive customers | not only demand the highest product quality and the best service but also want the lowest prices |
| Passive customers | Do not generate high costs, but they are willing to accept high prices |
| Bargain basement customers | Do not require much service, but they also do not generate high profits |
| Carriage trade customers | Generate high revenue but could also be expensive to serve |
| Upselling | The practice of selling an item that is a higher-end product in order to generate more revenue |
| Cross-selling | Occurs when a customer is encouraged to purchase an additional product that can be used in conjunction with the original product |
| Contribution margin | Allows costs to be assessed to determine how much is available from each division to cover fixed costs, as contribution margin analyzes sales' less variable costs |
| Full costing | A costing method in which the complete end-to-end costs of producing products and services are determined |
| Balance sheet | A balance sheet is a statement of assets, liabilities, and capital for an organization at a particular point in time |
| Control | Monitoring the behavior of organizational members and the effectiveness of the organization itself to determine whether organizational goals are being achieved, and taking corrective action if necessary |
| Return on Assets Managed | Measurement of profit used to evaluate marketing proposals |
| Customer profitability analysis | Grouping customers into profitability segments and determining the costs associated with each group. |
| Sales potential forecast | Describes the number of prospects and their buying power |
| RACI matrix | A responsibility assignment chart that maps out tasks, milestones, and key decisions and assigns the roles of responsible, accountable, consulted, and informed |
Created by:
kim.miller