Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
7Activity
0 of .
Results for:
No results containing your search query
P. 1
Budgeting

Budgeting

Ratings: (0)|Views: 517|Likes:
Published by Aashikkhan
BUDGETING
BUDGETING

More info:

Published by: Aashikkhan on Jul 20, 2010
Copyright:Attribution Non-commercial

Availability:

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

07/18/2013

pdf

text

original

 
BUDGETING
Accountancy Tuition Centre (Overseas Courses) Ltd 2002
0401
OVERVIEWObjective
To describe, illustrate and comment on the planning and control uses of  budgeting.
 
 Fixed 
 
 Flexible
 
 Flexed 
 
 Periodic
 
 Rolling 
 
 Incremental 
 
 ZBB
 
 ABB
 
Target setting 
 
 Hopwood 
 
 Budget politics
 
 Budget bias
 
McGregor 
 
 Responsibility accounting 
 
Management by objectives
OBJECTIVES OFBUDGETINGSTAGES INTHE BUDGETPROCESSQUANTITATIVETECHNIQUESSTANDARDS
 
 Ideal 
 
 Basic
 
 Expected 
 
Current 
BUDGETARYSYSTEMSMETHODS OFPREPARATIONBEHAVIOURALASPECTS
 
 Learning curves
 
 Linear regression
 
Time series
 The Examiner has identified budgeting and budgetary control as a major topic and hasspecifically referred to the topics of:
techniques such as the learning curve
alternative approaches such as incremental, ZBB and ABB.
 
BUDGETING
Accountancy Tuition Centre (Overseas Courses) Ltd 2002
0402
1 OBJECTIVES OF BUDGETING1.1 Co-ordination
Of the different activities of an organisation.
Should help achieve
 goal congruence.
 
Particularly important in decentralised organisations.
1.2 Responsibility
Delegation of responsibility to managers of 
business units
eg cost centres, profit centres, investment centres.
Part of responsibility accounting.
1.3 Utilisation
Optimal use of scarce resources.
Part of Manufacturing Resource Planning (MRPII)
1.4 Motivation
Budgets provide targets for individuals.
Care must be taken to ensure targets are not too easy or too difficult toachieve or 
demotivation
could occur.
1.5 Planning and control
Budgets are short term, quantified versions of long term strategic plans.
Control achieved through variance analysis.
1.6 Evaluation
Budgets can be used as
 standards
for performance evaluation.
However it is difficult to quantify some elements of business performance egcustomer satisfaction, employee morale, innovation.
1.7 Telling
Communication of corporate plans and objectives.
Should help goal congruence.
 
BUDGETING
Accountancy Tuition Centre (Overseas Courses) Ltd 2002
0403
2 STAGES IN THE BUDGET PROCESSExamples
Sales volume maximisation
Sales revenue maximisation
Profit maximisationEstablish long term corporateobjectivesLongterm planningProduce a specific (butrolling) corporate planProduce sales forecasts which wouldenable plans to be achieved
Functional
SalesProductionMaterial usageMaterials purchasesLabour Fixed overhead
Financial
Capital expenditureCashMASTER BUDGETBOARDAPPROVALRedraft long term plan in theform of annual budgetsBudgetofficer +BudgetcommitteeCompare budgets with actual performance: calculate variancesTake action on variances
improve performance
revise plansShortterm planningand budgetarycontrol 
3 BUDGETARY SYSTEMS3.1 Fixed budgets
Prepared at the anticipated level of activity.
Budget will be compared with actual results with no adjustment made for anychanges in activity level.
Limited use – does not give fair performance evaluation if variable costs aresignificant.

Activity (7)

You've already reviewed this. Edit your review.
1 thousand reads
1 hundred reads
KB's VOICE liked this
celmiravenancio liked this
ngron liked this
ahmetkose liked this

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)//-->