MACS-Mod-6.ppt (Size: 882.5 KB / Downloads: 210)
Budgeting and budgetary control: - Budgeting as a tool of management control- steps in budget preparation-Functional budget (simple Problems on Sales, Production, Material ), flexible budgets. (does not include Master budget & Cash budget)
A Budget is a financial and/or quantitative Statement, prepared prior to a defined period of time, of the policy to be pursued during that period for the purpose of attaining given Objective.
A budget is prepared prior to a defined period of time
It is prepared for the definite future period.
The policy to be followed to attain the given objectives must be laid before budget is prepared.
The budget is monetary and /or quantitative statement of that policy.
Budgetary Control is the establishment of Budgets relating to the responsibilities of executives to the requirement of a policy, and the continuous comparison of the actual with the budgeted results, either to secure by individual action the objective of the policy or to provide a firm basis for its revision.
Establishment of Budgets
Analysis Of Variation
Taking Remedial Action
Revision Of Budgets
Preliminaries for Installation
Creating Budget Centre
Prepared for a given level of activity.
It does not take into consideration any changes in expenditure arising out of changes in the level of activity.
Budget designed to change in accordance with the level of activity actually attained. It gives different budgeted costs for different level of activity
A budget which is prepared for use, unaltered over a long period of time.
Budget which is related to the current conditions and is prepared for use over a short period of time.
Long Term Budget:
Budgets prepared for a periods longer than a year.
Short Term Budget:
Prepared for a period less than a year.
Raw material, Labour, Plant utilization
SELLING & DISTRIBUTION
R & D BUDGET