Part 2 – Section A.3. Annual profit plan and supporting sche

[Hameed]

???? demonstrate an understanding of the role the sales budget plays in the development of an annual profit plan ???? identify the factors that should be considered when preparing a sales forecast and evaluate the feasibility of the sales forecast based on business information provided ???? identify the components of a sales budget and prepare a sales budget based on relevant information provided ???? demonstrate an understanding of the relationship between the sales budget and the production budget ???? identify the role that inventory levels play in the preparation of a production budget and define other factors that should be considered when preparing a production budget ???? prepare a production budget based on relevant information provided and evaluate the feasibility of achieving sales goals on the basis of production plans ???? demonstrate an understanding of the relationship between the direct materials budget, the direct labor budget, and the production budget ???? define the use of inventory levels and purchasing policies in developing a direct materials budget and the role that labor skills, union contracts, and hiring policies play in the development of a direct labor budget ???? prepare direct materials and direct labor budgets based on relevant information provided and evaluate the feasibility of achieving production goals on the basis of these budgets ???? identify the components of an employee benefit statement, e.g., employer contributions to social security, health and life insurance, and pension contributions ???? demonstrate an understanding of alternative ways of allocating employee benefit expense, e.g., as a portion of direct labor expense or as overhead, and the effect that allocation has on the financial statements ???? demonstrate an understanding of the relationship between the overhead budget and the production budget ???? demonstrate an understanding that a portion of the overhead budget may vary directly with production quantities while a portion of the overhead budget may consist of fixed expenses ???? define the components of overhead expense and prepare an overhead budget based on relevant information provided ???? identify the components of the cost of goods sold budget and demonstrate an understanding of the relationship between the cost of goods sold budget, the pro forma income statement, and the pro forma statement of financial position ???? demonstrate an understanding of contribution margin per unit and total contribution margin, identify the appropriate use of these concepts, and calculate both unit and total contribution margin ???? prepare a cost of goods sold budget based on relevant information provided ???? identify the components of the selling and administrative budget and demonstrate an understanding of the nature of these expenses ???? describe the relationship between the selling and administrative budget, the pro forma income statement, and the pro forma statement of financial position ???? understand how some components of the selling and administrative budget may affect the contribution margin ???? demonstrate an understanding of the relationship between the budget for acquisition of capital assets, the cash budget, and the pro forma financial statements ???? define the purposes of the cash budget and understand the relationship between the cash budget and all other budgets ???? identify the elements of a cash budget and demonstrate an understanding of the relationship between credit policies and purchasing (payables) policies and the cash budget ???? prepare a cash budget from information given and recommend the optimal investment/financing strategy ???? define the purpose of a pro forma income statement, a pro forma statement of financial position, and a pro forma cash flow statement and understand the relationship among these statements and all other budgets ???? prepare a pro forma income statement, a pro forma statement of financial position, and a pro forma cash flow statement from relevant information provided