Organization Roadmap – Performance and Budgets

Accountants and business decision-makers who want to understand concepts related to measuring and tracking company performance could benefit from this course. The course allows participants to become familiar with tracking the performance of a decentralized organization as well as understanding the benefits and key pieces of both a Master budget and a Flexible budget. Below is a listing of the items covered within the course.

Learning Objectives

Performance Measurement and Responsibility Accounting

  • Advantages and disadvantages of decentralized organizations;
  • Performance evaluation using cost centers, profit centers, and investment centers;
  • Controllable and uncontrollable costs and the use of responsibility accounting system;
  • Direct and indirect expenses and the allocation of indirect expenses including examples for utility, advertising, rent, wages and salaries, equipment and machinery deprecation, and service department expenses;
  • Department Income Statements and allocation of service department expenses under the direct, step, and reciprocal methods; and
  • Investment center performance evaluation and other non-financial performance measures.

Master Budgets

  • Discussion of budgeting benefits, timing, and components;
  • Illustration of a Master budget components including:
    • Operating Budget including budgeted sales, production, general and administrative expenses, and capital expenditures;
    • The cash budget; and
    • Budgeted Financial Statements including the Income Statement and Balance Sheet.

Flexible Budgets

  • Fixed budget and Fixed Budget Performance Reports;
  • Flexible budget including its purpose and preparation;
  • Setting standard costs and calculating direct material, direct labor, and manufacturing overhead variances; and
  • Illustration of a Flexible budget.