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JWU / Engineering / Accounting 1220 / What is pseudoparticipation?

What is pseudoparticipation?

What is pseudoparticipation?

Description

School: Johnson and Wales University
Department: Engineering
Course: Managerial Accounting
Professor: Marie higgins
Term: Fall 2018
Tags: Managerial Accounting Notes and final study guide
Cost: 50
Name: Accounting Final
Description: All the notes for material that will be on the test mainly chapter 9 with study pages that you can find additional information and exercises that go with the notes that you can reference in the book
Uploaded: 11/12/2018
7 Pages 22 Views 2 Unlocks
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Chapter 9             


What is pseudoparticipation?



 Pg. 381­386 , 309

Practice managerial accounting final exercises 

From Ex. 9­32, 43, 44, 45 and 50  review questions Ex.1(1­8) Ex 2 (1­11 ,34­40) Description of budgeting 

Helps business owner and managers to plan ahead by comparing what acutely happed to what s expected  in the budget

Good for small busnesses and nonprofits

Budgeting and planning and control

∙ Planning and control are linked 

∙ Planning is looking ahead to see what the company should do to reach a goal ∙ Control is looking backwards and comparing to previously planned outcomes ∙ Budgets­ are financial plans for the future and are a key component of planning  ∙ Befor making a budget an organization should make a strategic plan


What is budgetary slack?



∙ Strategic Plan­ makes the direction an organization will go in the future for activities and 

operations usually in a 5­year span

∙ Overall strategy is translated into the long and shorter objectives

                            Planning Cycle                                                    Control Cycle

Strategic Plan

Planni

Long-term

Short-Term

v


What are an organization used to influence a staff to ecert effort to achea a goal?



If you want to learn more check out What are the two types of shorelines?

Monitoring of

Actual Activity

Short-Term Plan

Budgets

Executi

Don't forget about the age old question of What is the difference between interference and diffraction?

Comparison of Actual with Planned 

Feedback

Investigation

Don't forget about the age old question of Does neuroscience really bear on the truth of theories of moral motivation?

Advantages of budgeting 

A budgetary system gives an organization several advantages Planning 

Corrective

­ Engorges people to develop an overall direction, foresee problems, and developed future  policies

Info for decision making 

­ Improves decision making

­ Better decisions keep customers happy while still providing a profiteer living for others  who work at the establishment

Standards for performance evaluation

­ Control­ is achieved by comparing actual results with budgeted results on a periodic basis ­ Difference between actual and planned results is feedback

Improved communication and coordination

­ For employees’ tube aware of their particular role and to acheves the objectives ­ Organization must all work together to achieve organizational objectives

The Master budgets 

Master budget­ is the financial plan for the organization as a whole usually for 1 year Contiguous budget­ is a moving 12­month budget as one month goes the next is added (never below or  above 12 months) Don't forget about the age old question of What are the 3 clusters of pds?

Direction and coordination 

­ Budget committee­ revise budget,provied guidelines and goals, resolves differences, 

approves the final budget, monitors performance of orginazation as the year goes on. ­ Controller =Budget director 

­ Budget director: responsible for directing and coordinating the organization’s overall  budgeting process

Major components of the master budget 

­ A master budget can be divided into operating and financial

­ Operating budgets­ are income­generating activities ( sales, production, finish good 

inventory

 Ultimate outcome is pro forma or budget income statement

­ Financial Budget­ inflows and outflows of cash and overall financal position   Expected financial position end of budget period shown in budgeted or pro 

forma, balace sheet

Master Budget and Its Interrelationships 

Sales  

Budget

 

Production

If you want to learn more check out What are the forms of integration at the farmer?

Direct

Materials

Purchase

Direct

Labor

Budget

Overhea

d

Budget

We also discuss several other topics like How can we identify dipole-dipole forces?

Long-Term Sales Forecast

Selling and  

Administrative  Expenses

 

 

 

Ending Finished

                               

Goods Inventory

             

 

Budget 

                       Unit Cost 

Cost of Goods

Budgeted Income  

Statement

 

Cash

Budgete 

d

 

Budgeted

Statement of Cash Flows

 

Capital

Budget

Preparing the operating budget

Consist of 

Sales budget, production budget, direct material Purchas, direct labor budget, overhead budget, sell and  admin expels, ending finish good invent budget, cost and goods sold budget

Sales budget

∙ Sales budget is approved by the budget committee and makes expected sales in units and dollars ∙ Are the biases for all the other operating budgeters and most of the financial budgets

∙ Sales forecast is just the initial estimate often adjusted by the budget committee Preparing the financial budget

Cash budget 

∙ Critical in managing a business

∙ Knowing when cash inflows and outflows occur, then a manager can plan to borrow cash when 

needed to , repay loans during periods of excess cash

∙ Cash Budget­ includes cash receipts, disbursements, any excess or deficiency of cash and 

financing 

∙ Cash budget = cash inflows ­ cash outflow

Cash availible 

­ Cash available consist to get beginning cash balance and the expected cash receipts ­ Cash Availible = Beginning cash balance + expected Cash Receipts 

Cash disbursements

­ The cash disbursement section lists all planned cash outlays for the period

­ Expenses that do not require cash outlay are exclude 

­ Typically, not included in the dissents section is intrest on short­term borrowing ­ Intrest expenditure is researched for the section on loan repayment

Cash excess or deficiency 

­ Adding lines show any borrowing or repayment necessary

­ Preliminary ending cash balance is called Cash Excess or cash deficiency

­ Minimum cash balace is simply the lowest amount of cash on hand that the firm finds  acceptable

Borrowings and repayments 

­ Company converts preliminary cash balance line to cash deficiency line may this may be 

borrowing or repairing money 

­ Excess cash is availible it sows planned repayments, incuding expense

Ending cash balance 

­ Last line of the cash budget planned amount of cash on hand at the end of the period  ­ Ending Cash balance= cash available­ expected cash disbursements 

Preparing a cash budget

­ Only cash expenditures are included in the cash budget

­ Expenses included depreciation expense, is a non­cash expense depreciation expense  subtracted from totals to yield and for selling and administrative expose

Using budgets for performance evaluations

Alignment of managerial and orginzational goals is referred to as goal congruence Dysfunctional behavior is indival behavior that is in basic conflict with the goals of the orginazation ∙ Ideal budgetary system acheves complet goal congruence and creates a drive in manager to  succeed goals in an ethical manar

Frequent Feedback on Performance

∙ Know how doing as the year progresses this helps to take corrective actions and to change plans  as necissary

Monetary and Nonmonetary Incentives

∙ Incentives­ are an organization used to influence a staff to ecert effort to achea a goal ∙ Monetary incentive­ used to control staf tendency to shirnk and waste recostes  = salary 

increases , bonuses and promotions

∙ Nonmonetary incentives­ incuding job enrichment increased responsibility and autonomy  regognition programs , can be use to enhancve a budgetary control system

Participative Budgeting

∙ Particvipative budgeting­ allows subordinate managers consideravle say in how the budgets are 

established 

∙ fosters creativity

∙ sub managers creat the budget

Particpative budgeting has three potecial problems: 

o Setting standads that are either too high or too low 

o Bulinding slack into the budget

o pseudoparticipation

Standard Setting 

­ Some may set the budget either to lose or too tight 

­ Mistake in setting the budget result in decreased performance levels 

­ Too easily achieved they might lose intrest  and performance 

Budgetary Slack 

­ Budgetary slack ( padding the budget ) a manger deliberate underestimates revenue or  overestimated in an effort to make the future period paper less attractive in the budget 

than they think  it will be in reality 

­ Increases likelihood that it will acheves the budget

Pseudoparticipation

­ Pseudoparticipation=Top management assumes total control of the budget process,  seeking superficial participation form lower employees

Realistic Standards

∙ Gauge performance should be based on realistic contains and expectations reflects operating 

realities

o Actual levels of activity: Flexible budgets to ensure cost realistically compare with cost 

of activity

o Seasonal Variations: Interim budgets reflect seasonal effects

o Efficiencies: Budgetary cuts based on planned increases of efficiency not across­the­ 

board reductions

o General economic trends: general economic need to be considered 

 significant increase in sales when recession projected foolish and dangerous Controllability of costs

∙ Controllable costs­ costs manager can influence

∙ If noncontrollable cost put in budget of subordinate managers to help understand costs need to be  coved be separated controllable costs labeled as noncontrollable 

Multiple measures of performance

∙ Myopic behavior – when manger take actions improve budgetary perforce in short run but bring  long­run harm to the firm.

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