【正文】 dgeting is an iterative process in which different groups prepare preliminary budgets, and then e together to identify and resolve differences.171。 Gross margin measures profitability after direct production costs but before other costs that are not specifically tied to production, such as marketing, administrative, and interest expenses. Gross margin = $40,000/$120,000 = 33%Personal InsightsInterpret numbers with careRelated TopicFinance EssentialsBudgeting OverviewEvaluating management39。 but what you can do is find out about the surrounding circumstances, which tell you about the risks attached to the numbers and you can do quite a lot that way. Never fall for averages。 Operating budgets reflect daytoday expenses and depreciation (the current portion of capitalized expenses). They typically cover a oneyear period.Approaches to BudgetingTraditional budgeting and alternate approachesMei Po holds up two different kinds of budget spreadsheets.Many organizations use a traditional budget—a budget that covers a one year period and presents forecasts that do not change during the life of the budget cycle. Companies use traditional budgets because they are easy to put together and simplify coordination of budget assumptions across different departments. Traditional budgets, however, have been under growing attack from those who feel that they no longer serve a modern organization39。187。 Equipment leases PackagingActivityWhen is a fixed cost not fixed?How to Categorize ExpensesFixed and variable costsActivity: When is a fixed cost not fixed?窗體頂端Sophie39。s fixed costs are 50 and its variable costs are 0. Variable costs steadily increase at per unit. Fixed costs remain at 50 until 300 units, at which point they jump to 100. They remain at 100 until 600 units, at which point they jump to 150. They remain at 150 until 900 units, at which point they jump to 200. This trend continues for all available data. CalcuTech leases two fabrication machines, each of which produces 300 calculators. Increased demand leads Sophie to increase production of the MathTech calculator from 500 units to 800 units. After the increase, what happens to the fixed cost, and what is a possible reason for this?The fixed costs increase, because Sophie will have to pay more for raw materials.Not the best choice. While the fixed costs will increase, raw materials are a variable cost that directly correlates to production rates.The fixed costs stayed the same, because these costs do not change for any variation in production.Not the best choice. Fixed costs stay the same over a wide range of production volume. In this case, the cost for leasing fabrication machines would stay the same whether Sophie was producing 300 units or 600 units. But even fixed costs can increase when drastic change occurs.The fixed costs increase because Sophie has to lease an additional fabrication machine to meet the new demand.Correct choice. Sophie will need to lease another fabrication machine to meet the additional demand. While leasing a fabrication machine would usually be a fixed cost, even fixed costs can increase when large production changes occur.窗體底端Differentiating between fixed and variable costs is an important part of creating a budget. Check your understanding of these two categories.Exit activityAllocated costsOperating budgets may include allocated costs—costs associated with operating the overall pany that are not tied to individual products or departments. The most significant allocation is usually overhead. This figure typically includes the office rent for the building occupied by corporate headquarters, and salaries and expenses associated with corporate management. How these costs are attributed to individual departments varies from one pany to another. Some organizations may allocate overhead to certain department budgets—those that produce revenue, for example—and not others.171。 Improved accuracy in identifying resource needss larger strategic priorities and the department or business unit39。 Previous |Nextt wonderful now so the graph es down a bit. Then for the next four years it goes up, and the ending is always Y percentage higher than the beginning. First, one needs to understand why people do that. You39。 Leisure Division in 1983, followed by Managing Director of Ladbroke Hotels in 1985.He spent 15 years with Grand Metropolitan, mainly in sales and marketing, which culminated in a Board position as Worldwide Marketing Director.Following Ladbroke Group39。 The history of sales growth for your pany39。187。 Planned changes in sales and promotion activities171。187。s just natural human emotion. Be aware that any forecast for the future will be optimistic。s in betting hotels, holiday camps, bingo or machine sales—ever bringing me a fiveyear forecast (which is what most people ask for) where business wasn39。Setting assumptionsUnless we find some way to keep our sights on tomorrow, we cannot expect to be in touch with today. —Dean RuskAll budgeting requires making assumptions about the future. In many panies senior management will municate key assumptions that are to be used throughout the organization—such as a 5% increase in salaries, or a 10% increase in sales volumes. In other cases the assumptions are specific to an individual department39。187。Activitybased budgeting (ABB)Organizations that use ABC to allocate overhead and other costs to individual departments may also adopt activitybased budgeting (ABB). Activitybased budgeting starts with forecasting the planned sales volume for each product. Historical data from the activitybased costing system is then used to estimate the required activities to produce that volume, the resources required to support those activities, and the cost of those resources.The primary advantage of activitybased budgets is that costs can be more accurately associated with activities, making the planning