Chapter 9, Problem 9.74ACT

Discussion Questions

1. 1. “The sales budget is the most important budget.” Do you agree or disagree? Explain your answer.
2. 2. List at least four reasons why a company would use budgeting.
3. 3. Describe the difference between an operating budget and a capital expenditures budget.
4. 4. Describe the process for developing a budget.
5. 5. Compare and contrast “participative budgeting” with “top-down” budgeting.
6. 6. What is a budget committee? What is the budget committee’s role in the budgeting process?
7. 7. What are operating budgets? List at least four operating budgets.
8. 8. What are financial budgets? List at least three financial budgets.
9. 9. Managers may build slack into their budgets so that their target numbers are easier to attain. What might be some drawbacks to building slack into the budgets?
10. 10. How does the master budget for a service company differ from a master budget for a manufacturing company? Which (if any) operating budgets differ and how, specifically, do they differ? Which (if any) financial budgets differ and how, specifically, do they differ?
11. 11. Give an example of a sustainable practice that would affect a company’s budget. How might this sustainable practice, if adopted, impact the company’s budget in both the short-term and in the long-term?
12. 12. Why might a company want to state environmental goals for increased sustainability in its budgets? Explain.