You know how important it is to create budgets for your household. How doesbudgeting help management make good business decisions?
Budgeting is important task for a business to be successful.Management must be responsible to do this. Being able to plan andcoordinate resources and expenditures is key so businessmanagement will create a surplus of money instead of a deficit.Creating a surplus will help business management allocate capitalbetter. For example, if the company budgets wisely, the company canuse extra resources to invest back into the company such as hiringmore labor to expand growth. Budgeting is a fundamental processwhere management spends the company wisely to improve overallgrowth.
Week 7 Discussion Question 2
Post your response to the following:
What are some of the different types of budgets? Describe in detail onetype of budget covered in the text. Describe what the budget is usedfor and what information it provides a business. Then, as you respondto your classmates, discuss how the budget you described relates tothe budget they described. Discuss how a business benefits from eachof the budgets.
There are many different type of budgets. They include: Direct Materials Budget, Sales Budget,Direct Labor Budget, Production Budget, Manufacturing Overhead Budget, and Selling andAdministration Expense Budget.One type of budget is the sales budget. It is the first budget that is prepared. It is the mostimportant budget because every budget after depends on it. Accuracy and a detailed sales budget will depict a company's well being. For example, if sales budget forecasts too high, it will lead toloss of income because of high inventory. The sales budget is important to figure out themaximization of profits. By multiplying the unit selling price and the number of units sold, will getyou the total sales in dollars. When calculating current sales, the company can estimate futuresales.
Week 9 Discussion Questions
your response to the following: Think back over what you have studied andlearned in this course. Do you have a new perception of or appreciation for thefield of accounting and how it contributes to business? Explain.