Q/ Figure/
Module Part REF Index Knowledge of Questions Page Index
M3 Module 3: Planning, budgeting and forecasting 99
M3 Part A Introduction to Plans, Budgets and forecasts 100
M3 Part A Relationship between budgets and strategic planning 101
M3 Part A Table 3.1 Differences between strategic and operational planning Strategic VS Operational planning 101 Table
M3 Part A Roles of operational plans, budgets and forecasts 101
1. Long term objective
2. Operational plan > Master budget: Operational
M3 Part A Figure 3.2 Relationship between budgets and strategy and financial budget 102 Figure
M3 Part A Example 3.1 Limiting factors for budgets 103 Question
M3 Part A Purposes of a budget 103
M3 Part A Example 3.2 Using budgets to allocate scarce resources Purposes of a budget 103 Question
M3 Part A Relationship with responsibility accounting 105
1. Revenue centres
2. Cost centres
3. Profit centres
M3 Part A Figure 3.3 Four common types of responsibility centre 4. Investment centres 105 Figure
M3 Part A Revenue centres 106
M3 Part A Cost centres 106
M3 Part A Profit centres 106
M3 Part A Investment centres 106
M3 Part A Responsibility accounting 106
M3 Part A Planning and control 107
M3 Part B Developing master budgets 108
M3 Part B Impact of external and internal factors on budgets 108
M3 Part B Table 3.2 Internal and external factors that affect business environments Internal VS External factors 109 Table
8 Steps:
Step 1: Sales budget
Step 2: Production budget
Step 3: Direct materials cost budget
Step 4: Direct manufacturing labour costs budget
Step 5: Manufacturing OH costs budget
Step 6: Finished goods inventory budget
Step 7: COGS budget
M3 Part B Figure 3.4 Preparing operational budgets in manufacturing organisations Step 8: Period costs budgets 110 Figure
M3 Part B Step 1: Sales budget 111
8 Steps to develop operational budget in
M3 Part B Example 3.3 Supply and demand influence on the sales budget manufacturing org - Step 1. Sales budget 111 Question
8 Steps to develop operational budget in
M3 Part B Question 3.1 Kabuki sales budget manufacturing org - Step 1. Sales budget 111 Question
M3 Part B Step 2: Production budget 111
M3 Part B Step 3: Direct materials cost budget 112
8 Steps to develop operational budget in
Determining the quantity of direct material: manufacturing org - Step 3. Direct materials cost
M3 Part B Example 3.4 Direct material purchased is different from direct material used budget 112 Question
8 Steps to develop operational budget in
manufacturing org - Step 3. Direct materials cost
M3 Part B Example 3.5 Explaining variances in budgeted and actual costs of raw materials budget 112 Question
M3 Part B Step 4: Direct manufacturing labour costs budget 113
M3 Part B Step 5: Manufacturing overhead costs budget 113
M3 Part B Step 6: Finished goods inventory budget 113
M3 Part B Step 7: Cost of goods sold budget 113
M3 Part B Step 8: Period costs budgets 114
M3 Part B Preparing budgets in non-manufacturing organisations 114
1. Budgeted income statement
2. Cash budget
3. Budgeted balance sheet
M3 Part B Preparing financial budgets 4. Capital expenditure budget 114
M3 Part B Budgeted income statement 114
M3 Part B Cash budget 115
M3 Part B Budgeted balance sheet 115
M3 Part B Capital expenditure budget 115
M3 Part B Preparing budgets for various departments 115
M3 Part B Example 3.6 Preparing budgets for decentralised organisations 116 Question
M3 Part B Preparing flexible budgets 116
M3 Part B Example 3.7 Flexible sales budget Preparing flexible budgets 116 Question
Module Part REF Index Knowledge of Questions Page Index
M3 Module 3: Planning, budgeting and forecasting 99
M3 Part A Introduction to Plans, Budgets and forecasts 100
M3 Part A Relationship between budgets and strategic planning 101
M3 Part A Table 3.1 Differences between strategic and operational planning Strategic VS Operational planning 101 Table
M3 Part A Roles of operational plans, budgets and forecasts 101
1. Long term objective
2. Operational plan > Master budget: Operational
M3 Part A Figure 3.2 Relationship between budgets and strategy and financial budget 102 Figure
M3 Part A Example 3.1 Limiting factors for budgets 103 Question
M3 Part A Purposes of a budget 103
M3 Part A Example 3.2 Using budgets to allocate scarce resources Purposes of a budget 103 Question
M3 Part A Relationship with responsibility accounting 105
1. Revenue centres
2. Cost centres
3. Profit centres
M3 Part A Figure 3.3 Four common types of responsibility centre 4. Investment centres 105 Figure
M3 Part A Revenue centres 106
M3 Part A Cost centres 106
M3 Part A Profit centres 106
M3 Part A Investment centres 106
M3 Part A Responsibility accounting 106
M3 Part A Planning and control 107
M3 Part B Developing master budgets 108
M3 Part B Impact of external and internal factors on budgets 108
M3 Part B Table 3.2 Internal and external factors that affect business environments Internal VS External factors 109 Table
8 Steps:
Step 1: Sales budget
Step 2: Production budget
Step 3: Direct materials cost budget
Step 4: Direct manufacturing labour costs budget
Step 5: Manufacturing OH costs budget
Step 6: Finished goods inventory budget
Step 7: COGS budget
M3 Part B Figure 3.4 Preparing operational budgets in manufacturing organisations Step 8: Period costs budgets 110 Figure
M3 Part B Step 1: Sales budget 111
8 Steps to develop operational budget in
M3 Part B Example 3.3 Supply and demand influence on the sales budget manufacturing org - Step 1. Sales budget 111 Question
8 Steps to develop operational budget in
M3 Part B Question 3.1 Kabuki sales budget manufacturing org - Step 1. Sales budget 111 Question
M3 Part B Step 2: Production budget 111
M3 Part B Step 3: Direct materials cost budget 112
8 Steps to develop operational budget in
Determining the quantity of direct material: manufacturing org - Step 3. Direct materials cost
M3 Part B Example 3.4 Direct material purchased is different from direct material used budget 112 Question
8 Steps to develop operational budget in
manufacturing org - Step 3. Direct materials cost
M3 Part B Example 3.5 Explaining variances in budgeted and actual costs of raw materials budget 112 Question
M3 Part B Step 4: Direct manufacturing labour costs budget 113
M3 Part B Step 5: Manufacturing overhead costs budget 113
M3 Part B Step 6: Finished goods inventory budget 113
M3 Part B Step 7: Cost of goods sold budget 113
M3 Part B Step 8: Period costs budgets 114
M3 Part B Preparing budgets in non-manufacturing organisations 114
1. Budgeted income statement
2. Cash budget
3. Budgeted balance sheet
M3 Part B Preparing financial budgets 4. Capital expenditure budget 114
M3 Part B Budgeted income statement 114
M3 Part B Cash budget 115
M3 Part B Budgeted balance sheet 115
M3 Part B Capital expenditure budget 115
M3 Part B Preparing budgets for various departments 115
M3 Part B Example 3.6 Preparing budgets for decentralised organisations 116 Question
M3 Part B Preparing flexible budgets 116
M3 Part B Example 3.7 Flexible sales budget Preparing flexible budgets 116 Question
