1. What are the major benefits of budgeting?

2. List the four budgeting objectives. Explain.

3. What are the components of a master budget?

4. What is budgetary slack? Why might managers try to build slack into their budgets? Examples?

5. Explain why the capital expenditures budget needs to be prepared before the cash budget, the budgeted balance sheet, and the budgeted statement of cash flows.

6. What are the steps in preparing an operating budget?

7. What does "management by exception" mean?

8. Why do companies allocate indirect costs to departments?

9. What is continuous budgeting? What is its benefit?

10. What is sensitivity analysis? Why is it important for managers?