Budgeting: Planning for Success - Budgeting and Decision Making

This book is the twelfth of fifteen books which introduces the basic principles of accounting. In this book you will learn about using budgeting to plan for success. The importance of budgeting is emphasized, while focusing on the process and human behavior. Various forms of budgets are introduced. The major managerial budgets are presented, including: sales, production, direct materials purchases, direct labor, factory overhead, selling and administrative expense, and cash. Budget financial statements are also discussed.

Part 1 – Budgeting: Planning for Success

1. Importance of Budgets
1.1 Forms and Functions
1.2 Avoiding Business Chaos
1.3 An Electrifying Case in Budgeting
1.4 Recapping Benefits of Budgeting

2. Budget Processes and Human Behavior
2.1 Budget Construction
2.2 Mandated Budgets
2.3 Participative Budgets
2.4 Blended Approach
2.5 Organizational Structure Considerations
2.6 Flattening the Organization Chart
2.7 Budget Estimation
2.8 Slack and Padding
2.9 Zero-Based Budgeting
2.10 The Impossible Budget and Employee Capitulation
2.11 Ethical Challenges in Budgeting

3. Components of the Budget
3.1 Sales Budget
3.2 Production Budget
3.3 Direct Material Purchases Budget
3.4 Direct Labor Budget
3.5 Factory Overhead Budget
3.6 Selling and Administrative Expense Budget
3.7 Cash Budget
3.8 Budgeted Income Statement and Balance Sheet
3.9 External Use Documents
3.10 Performance Appraisal

4. Budget Periods and Adjustments
4.1 Continuous Budgets
4.2 Flexible Budgets
4.3 Encumbrances

Appendix

Larry M. Walther, Ph.D., CPA, CMA, is the Ernst & Young Professor and Head of the School of Accountancy at Utah State University. Dr. Walther has authored numerous accounting textbooks and articles, and has served as director and/or consultant to a number to a number of public and nonpublic companies. Dr. Walther obtained his Ph.D. in accounting from Oklahoma State University and has public accounting experience with Ernst & Young. He currently serves as the accounting accreditation committee of the AACSB and is past president for the federation of schools of accountancy.

Dr. Chris Skousen obtained his Ph.D. at Oklahoma State University. He earned MBA and BA degrees from Utah State University. Dr. Skousen gained public accounting auditing experience with KPMG in their Portland, Oregon office, and as an intern in their in Düsseldorf, Germany office, and at Squire & Co. Dr. Skousen has taught accounting at Utah State University, The University of Texas at Arlington, Oklahoma State University, and Brigham Young University-Idaho. He has published in Accounting Horizons, Behavior Research in Accounting, Accounting and the Public Interest, and other journals.