Welcome to Scribd. Sign in or start your free trial to enjoy unlimited e-books, audiobooks & documents.Find out more
Download
Standard view
Full view
of .
Look up keyword
Like this
0Activity
0 of .
Results for:
No results containing your search query
P. 1
null

null

Ratings: (0)|Views: 0|Likes:
Published by ajithsubramanian

More info:

Published by: ajithsubramanian on Oct 23, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less

10/23/2012

pdf

text

original

 
PART 1 LESSON 1FORECASTING TECHNIQUES 
LESSON 1 B
UDGETING CONCEPTS
CONTENT
1.Meaning2.Purpose of Budgeting3.Features of Successful budgeting process4.Budget administration5.Budget behavioral Consideration6.Factors influencing budgeting process7.Uses of cost standards8.Management by Objectives9.Time Frame for budgets10.Sensitivity Analysis11.Expected ValueRukshiCA1
 
PART 1 LESSON 1FORECASTING TECHNIQUES 
MEANING:
 A budget is a quantitative expression of a proposed
 future plan of action
. Itrelates to a particular set
of 
time period 
. It acts as a blueprint for the organization to followin the budget time period. Budgets quantify management’s targets regarding future income,cash flows, financial position. Budgets are projected financial statements. Budgets includea budgeted income statement, budgeted cash flow statement, and budgeted balance sheet.Forecasts act as starting point of all the budgetary process. Forecasts help in preparingrevenue budgets. Budgets are also useful as guideposts. Organizations actual performanceis compared with budgets to determine whether organization is lagging or exceedingexpectations
Budget is a formal quantification of Management plans and has the followingfeatures:
1.An organization has goals. Plans are formulated to reach the goals.2. Plans specify the resources to be allocated and expected results3.A Budget is a detailed written expression of an entity’s expectations with respect toacquisition and use of resources for a specified period of time4.A budget is a management tool.
It is a quantitative statement of an organizationsplan of action for a specified period.
5.A budget is a quantitative expression, for a time period of a proposal of future planof action (Horngren).6.Budget can cover both financial and non financial aspects of plans and acts as blueprint for the organization to follow in the specified time period.7.Budgets quantify management’s expectations regarding future income, cash flows,and financial position.8.Budgets prepare financial statements for future periods covering budgeted incomestatement, a budgeted cash flow statement and a budgeted balance sheet.9.Budgets are not only means of communicating management plans to theorganization but also provide a basis for evaluating segment and organization performance by providing yardsticks against which actual performance could becompared.RukshiCA2
 
PART 1 LESSON 1FORECASTING TECHNIQUES Budgets touch every aspect of an organizations functioning. Budgets are prepared for allthe functions of the organization as illustrated below:
Purpose of Budgeting:
1.
Forces Planning:
 Budgets force managers to plan ahead for the activities of theorganization. The budgeting process compels managers at every level in theorganization, from chairman of the board to departmental supervisor to plan.RukshiCA
 
Management Accounting SystemPlanning
MARKETING
Sales BudgetSelling/distribution OH Budget
 
FINANCECapital BudgetCash BudgetBudgeted Income StatementBudgeted B/s/ cash FlowOPERATIONSProduction BudgetDM BudgetDL BudgetMOH Budget
INPUTSControl
IIIResponsibilityAccounting/CostAccumulationIVPerformanceMeasurement/Cost Estimation
 
I
Std Costs/ABC/Flexible
Budgets/Forecasts
IIBudgeting 
Cash inflowFinished Goods
OUTPUTS
3
Cash outflowSales
Management/Coordination

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->