1. Define the term budget. How are budgets used in planning?
2. Define control. How are budgets used to control?
3. Explain how both small and large organizations can benefit from budgeting.
4. Discuss some of the reasons for budgeting.
5. What is a master budget? An operating budget? A financial budget?
6. Explain the role of a sales forecast in budgeting. What is the difference between a sales forecast and a sales budget?
7. All budgets depend on the sales budget. Is this true? Explain.
8. How do master budgets differ among manufacturing, merchandising, and service organizations?
9. Discuss the differences between static and flexible budgets. Why are flexible budgets superior to static budgets for performance reporting?
10. Explain why mixed costs must be broken down into their fixed and variable components before a flexible budget can be developed.
11. Why is goal congruence important?
12. Why is it important for a manager to receive frequent feedback on his or her performance?
13. Discuss the roles of monetary and nonmonetary incentives. Do you believe that nonmonetary incentives are needed? Why or why not?