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CMA ESSAY QUESTION  COST TERMS AND CONCEPTS Q1    Lucas Manufacturing has three cost objects that it uses to accumulate costs for its manufacturing plants.  They are:                   Cost object #1:      The physical buildings and equipment                   Cost object #2:      The use of buildings and equipment                   Cost object #3:      The availability and use of manufacturing labor             The following manufacturing overhead cost categories are found in the accounting records:                ...

1.1     BUDGETING CONCEPTS 1.       A budget (profit plan) Is a realistic plan for the future expressed in quantitative terms. a.      The budget is a planning tool. 1)     A budget is a written plan for the future. 2)      Companies that prepare budgets anticipate problems before they occur. a) EXAMPLE: If a company runs out of a critical raw material, it may have to             shut down. At best, it will incur extremely high freight costs to have the          needed. materials rushed in. The company with a budget will have anticipated the shortage and planned around it. 3)      A firm that has no goals may not always make the best decisions. A firm with a goal in the form of a budget will be able to plan. b.      The budg...