Pro-Forma Financial Statements Are Prepared Using the Information Developed in the Budget

question 67

Essay

Pro-forma financial statements are prepared using the information developed in the budget process.These statements reflect the results of operations and the financial position of the organization as if all actions planned in the budget had occurred.Many of the master budget components provide direct input to the pro-forma financial statements.
Required:
For each of the following components of the financial statements,indicate which pro-forma financial statement will show the item Income Statement or Balance Sheet and the budget within the master budget where the the item originated.Number 1 provides an example.

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Definitions:

Batch Costs

Expenses associated with processing a batch of products, including labor, materials, and overhead, used to calculate per unit costs.

Faculty Level Costs

The expenses associated with employing teaching and academic staff at educational institutions.

Level of Fixed Costs

The total amount of costs that do not vary with production volume, such as rent, salaries, and insurance.

Level of Risk

A measure of the uncertainty associated with an investment or decision, often evaluated in terms of the variability of returns or potential for loss.