The Master Budget and Sub-Budgets

Author: Rob Stephens

Budgeting consumes a massive amount of time and resources. It's a stressful and busy time. Are there ways to improve the effectiveness of the investment we make in the budget process? Can we make better budgeting decisions that lead to higher performance? There are options within and beyond traditional budgeting. Each company should consider these options and decide which could improve their budgeting process. Budgeting has many benefits that we can continue to capture and build upon. This course will focus on the Master Budget and the budgets that comprise it. There's a method to the madness when different types of assumptions and calculations are layered into the budget. However, the process is not entirely sequential. It abounds with iterative loops.

Publication Date: February 2024

Topics Covered

• The master budget and sub-budgets
• The budgeting process

Learning Objectives

• Recall the role of the master budget and sub-budgets
• Recall key steps in the budgeting process
• Identify cash implications of a budget
• Identify the formula for Cost-Volume-Profit (CVP) analysis
• Identify how step costs vary with volume
• Identify a useful tool for calculating break-even analysis in Excel
• Identify the budgeting type being used when revenue is set at the company level and then allocated to groups/departments/centers
• Identify the two methods for calculating direct production labor
• Identify the most relevant point for measuring capacity in a production process
• Identify the term for the loss of sales at one price to sales of the same product at a lower price

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Finance (3 hours)

Program Prerequisites
None

Advance Preparation
None