MAN 4330 Exam 3 Exam (Questions and Answers)

What are the benefits of Budgeting? - Answer-1. Control of your Expenses (Revenue Ratio) Expenses Revenue = LOSSES 2. Coordinate Activities (Budget for ALL Departments and activities) Develop a budget for all major HR 3. Set some performance standards (Goal for Sales and Operational Budgets) 4. Evaluation Tool (Deviation Analysis +- Comparison to actual results to planned (budgeted) 5. Corrective & Remedial control (Take necessary action to prevent future over expenditures or under sales forecast) What is the Budgeting Process? - Answer--All starts with Revenue Projections! Forecasts! - Effects available resources for all business activities- very difficult process but critical~ - UNDERSTAND YOUR CHALLENGES/Role of Assumptions- explains the reasoning to determine the budget What is MEA? - Answer-Used to identify the issues such as economic activity, competitive activity, market expectations/demands, pricing tech development What is part of the budgeting process? - Answer-Develop complete charts of accounts Research costs for each account Develop a written budget for each account Avoid straight line estimating Forecasts sales volume Relate to revenue and projected profits to HR requirements Project best case/worst case scenarios Project break-even budget pointForecasting Revenue- Sales or budget Allocations - Answer-Minimum Budget- determines the minimum costs for each activity to meet perform. requirements Must do Budget- minimum revenue to survive 2 common Budget Approaches - Answer-Bottom Up- determine the cost for each activity and sum them to determine Revenue needs Top down- begin with estimate (or available) revenue and allocate to the business activities Forecasting compensation Budgets: A process view - Answer-- Determine pay of present employees - Calculate total compensation for present employees (salary + benefit rider) -Estimate (forecast) present employee total compensation for the next year -Include forecasted pay adjustments and possible bonuses to occur during the year -Calculate total compensation costs for additional new positions! -Total all comp costs Who are Special Groups? - Answer-Supervisors, Professional employees, Sales Staff, Contingent Workers, Corporate directors, Top Management Executives