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3 major sections of cash budget,”(1) cash receipts section, (2) cash payments section
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Read morebatch-level activities
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Read moresteps for quantitative analysis of equipment replacement decision,”(1) determine what relevant costs/revenue the company will incur if it keeps the old machine (market value opportunity cost, salvage value, operating expenses)(2) determine what relevant costs/revenue will be incurred if the company purchases and uses the new machine (cost of buying new machine, salvage value
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Read moreitems under cash receipts section of cash budget
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Read moreproduction-level activities,”support specific products or product lines; ex: raw materials inventory holding costs, engineering development costs, and legal fees for patents, copyrights, trademarks
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Read morestrategic planning,”involves making long-term decisions such as defining the scope of the business, determining which products to develop or discontinue
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Read moreitems under cash payments section of cash budget
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Read morefacility-level activities,”benefit the production process as a whole and are not related to any specific product, batch, or unit of production; ex: insurance, security, general utilities
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Read morecapital budgeting,”focuses on intermediate range planning; involves such decisions as whether to buy or lease equipment, whether to stimulate sales
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