CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1 Budget Planning

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 14-1 BUDGET FUNCTIONS Planning Operational control Department coordination page 413

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 14-1 BUDGET PERIOD Long-range budget Annual budget Quarterly budget Monthly budget page 413

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 14-1 SOURCES OF BUDGET INFORMATION Company records General economic information Company staff and managers Good judgment page 414

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 14-1 COMPARATIVE INCOME STATEMENT page 415

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 14-1 INTERPRETING THE COMPARATIVE INCOME STATEMENT page 416 Compare the percentage change in expenses or costs to the percentage change in sales.Effect on net income If the % increase  in expenses or costs > the % increase  in sales, net income  decreases. Unfavorable If the % increase  in expenses or costs < the % increase  in sales, net income  increases. Favorable If the % decrease  in expenses or costs > the % decrease  in sales, net income  increases. Favorable If the % decrease  in expenses or costs < the % decrease  in sales, net income  decreases. Unfavorable

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 14-1 TERMS REVIEW budgeting budget budget period comparative income statement page 417