Section 1: 40–50%B3
Budgeting, Forecasting, and Projection
Exam Insight
BAR expects you to know the master-budget sequence cold — sales drives production, which drives materials, labor, and overhead, which feed the cash budget and the pro forma statements. Get the order wrong and the whole plan unravels.
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What AICPA Wants You to Know
- 1Sequence the components of the master budget correctly
- 2Build a production budget from a sales forecast and desired ending inventory
- 3Construct a direct materials purchases budget
- 4Distinguish flexible from static budgets and explain why flexible budgets isolate efficiency from volume
- 5Prepare a cash budget and identify financing needs
- 6Compare forecasting methods (regression, moving average) and special budget approaches (zero-based, rolling)