# BEC Strategic Planning

 What makes up a Master Budget 1. Operating Budget: 2. Finanical Budget:3. Capital Expenditure Budget: Sequence of Budget preparation Sales budgetProduction BudgetBudget of other expense and revenuepro forma Financial statement Forecasting Tools/Methods Quantitative Models: REGRESSION ANALYSIS: Linear regression is a method for studying the relationship between a dependent variable and one or more independent variables. Y=A+bx Probability Theory: Helps Deal with Uncertainty. Coeefficient of Correlation: measures relationship between 1 dependend and 1 independent variable. + if variable moving in the same direction- if moving in different0 if scattered Exponential Smoothing: Perdicts sales based on historical amounts. used to prepare annual profit plan  Judgement Model:Delphi: Relies on judgement through questionaires. Types of cost Explicit Costs Explicit costs are documented out-of-pocket expenses (e.g., wages, materials, and Utilities).  Implicit Costs (Includes Opportunity Costs) Implicit costs are opportunity costs of inputs supplied by the owners (entrepreneurship, equity, capital, etc.). a. Opportunity Cost Definition- Opportunity cost represents the value of the next best alternative foregone (or not chosen). b. Opportunity Cost Measurement -Opportunity cost is usually considered to be the profits that are lost from business because one strategy is pursued instead of another. c. Items with not alternative use have no opportunity vc. ost Authortina16marie ID183920 Card SetBEC Strategic Planning DescriptionChapter 6 of Bisk Updated2012-11-16T02:53:44Z Show Answers