Components of a Budget

Many employees are involved in the formation of a corporation’s budget. Essentially, the chief executive sets the  upcoming objectives and expectations for the business. These are communicated to each manager who must keep these goals in mind when projecting his …

Budgeting Procedures

All companies operate under a budget. Depending on its size, a company can have multiple budgets for varying departments or just a simple estimate of income for the upcoming year. Managers plan their activities and express them in financial terms. …

Investment Centers

Investment center is a term describing accounting units used by managers responsible for capital investment decisions, revenues and current costs in large corporations. It measures the profit contribution of a particular division in the corporation in terms of the rate …

Management Accounting Systems

A company has a management hierarchy in place to oversee different aspects of the business. Ultimately, the chief executive or president is responsible for the success and failure of a company. He delegates responsibilities to his subordinates who in turn …

Calculations for Evaluating Investment Opportunities

Investing capital to expand a company or increase a product line requires capital budgeting. Capital budgeting is the process of allocating funds to investment in assets. There are many opportunities for investment available to businesses. Management must evaluate each of …

The Nature of Costs

When analyzing costs, it is helpful to divide them into three categories: fixed, variable, and semi-variable. Analyzing costs is necessary when a business is evaluating how to maximize profit and minimize loss through its decision-making. These decisions are made with …

A Nonprofit's Sales to the Public

The federal government imposes an unrelated business tax (UBIT) on nonprofits who regularly sell or trade goods or services that are unrelated to their organization’s primary mission. However, the federal government isn’t the only tax collector who comes knocking. The …

A Nonprofit’s Sales to the Public

The federal government imposes an unrelated business tax (UBIT) on nonprofits who regularly sell or trade goods or services that are unrelated to their organization’s primary mission. However, the federal government isn’t the only tax collector who comes knocking. The …

Unrelated Business Income Tax (UBIT)

For nonprofit organizations, the IRS makes a distinctions between income “substantially related” to the organization’s cause from other revenue which is not. Nonprofits with a tax-exempt status who participate in income producing activities around its mission are not subject to …