Budgetary Control

A Budget is a financial and/or

quantitative Statement, prepared prior to
a defined period of time, of the policy to
be pursued that period for the purpose
of attaining given Objective
Budget

Budgetary Control
Budgetary Control is the establishment
Budgetary Control is the establishment
of Budgets relating to the responsibilities
of Budgets relating to the responsibilities
of executives of a policy and the continuous
of executives of a policy and the continuous
comparison of the actual with the budgeted
comparison of the actual with the budgeted
results, either to secure by individual action
results, either to secure by individual action
the objective of the policy or to provide
the objective of the policy or to provide
basis for its revision
basis for its revision

Budgetary Control
Characteristics

Establishment of Budgets

Analysis Of ariation

!a"ing #emedial Action

#evision Of Budgets

Budgetary Control
OB$EC!%ES
OB$EC!%ES
Planning
Motivation
Communication
Control
Co-ordination
Performance
Evaluation

Budgetary Control
&reliminaries for %nstallation
&reliminaries for %nstallation
Creating Budget Centre
Creating Budget Centre
Accounting #ecords
Accounting #ecords
Organi'ation Chart
Organi'ation Chart
Budget Committee
Budget Committee
Budget (anual
Budget (anual
Budget &eriod
Budget &eriod
)ey *actor
)ey *actor

SA+ES B,-.E!
unctional Budgets

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CAS1 B,-.E!

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2E#O BASE- B,-.E!

*%3E-4A#%AB+E B,-.E!S

Capital E5penditure
Other Budgets

Capacity

Shortage of ra6 material

S"illed +abour

7or"ing Capital

.overnment restrictions

Sales 8orders9

+ABO,# 1O,#S

&O7E# S,&&+%E#S
)ey factor 8limiting factor

SA+ES B,-.E!
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CO/-%!%O/S
S&EC%A+ CO/-%!%O/S
Sales Budget

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<uantity &rice <uantity &roduct Area
Actual Budget
!ales Budget

4,98,750 62,250 4,45,000 56,000 5,60,000 71,000 Total
3,75,000
1,23,750
10
5
37,500
24,750
3,30,000
1,15,000
10
5
33,000
23,000
4,10,000
1,50,000
10
5
41,000
30,000
A
B
1,21,250 14,750 1,05,000 13,000 1,17,500 14,500 Total
95,000
26,250
10
5
9,500
5,250
80,000
25,000
10
5
8,000
5,000
90,000
27,500
10
5
9,000
5,500
A
B
1,65,000 16,500 1,50,000 15,000 1,95,000 22,000 Total
1,65,000
--
10
--
16,500
--
1,50,000
--
10
--
15,000
--
1,70,000
25,000
10
5
17,000
5,000
A
B
62,500 12,500 60,000 12,000 95,000 16,000 Total
--
62,500 5
--
12,500
--
60,000
--
5
--
12,000
30,000
65,000
10
5
3,000
13,000
A
B
1,50,000 18,500 1,30,000 16,000 1,52,500 18,500 Total
1,15,000
35,000
10
5
11,500
7,000
1,00,000
30,000
10
5
10,000
6,000
12,0000
32,500
10
5
12,000
6,500
A
B
North
South
East
West
Total
V P V P V P
A!tual "u#e 30,03 Bu$%et "u#e 30,04 Bu$%et "u#e 30, 05
Pro$u!t
Area

&#O-,C!%O/ B,-.E!
Sales
Budget
&roduction
Capacity
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#equirements
&roducts
(anufacturing
-epartments
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&roduction Budgets

&roduct A
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256 6,40,000 284 7,10,000
140
100
16
3,50,000
2,50,000
40,000
70
100
20
60
200
24
1,50,000
5,00,000
60,000
20
200
30
5,000
2,500
2,000
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Total
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P-240,T62N ,2ST B045ET
&roduction Cost Budgets

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&roducts
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.$ M$ ,'
.$ M$ +'
.$ 9ab$ .EP%$ 4

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.EP%$ 444
2$ :ariable cost
%$ :ariable Cost
ixed Production 2;$
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Product Cost
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%otal Cost
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8I9 Closing Stoc"
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&,#C1ASE B,-.E!

Cash Budget
Cash Budget is a detailed estimate
of Cash #eceipts from all sources
and Cash &ayments for all purposes
and the resultant Cash Balance
during the budget period

Cash Budget
Cash Budget *or the &eriod:;;
&articulars $an *eb (ar
!otal
#s #s #s #s
Opening Balance
Additions
Budgeted /et &rofit
-epreciations
&rovisions
Sale Of &lants
%ssue Of Capital and -ebentures
#eduction in -ebtors
#eduction %n stoc"
Accrued E5penses
%ncrease %n +iabilities
!otal Additions
!otal Cash Available
-eductions
-ividends
&repayments
Capital &rofit
%ncrease in Stoc"s
%ncrease in -ebtors
-ecrease in +iabilities
!otal -eductions
Cl Balance Of Cash


2BB 4 applications
D %dentifying decision ,nits
? +isting programmes, activities of each -,
A Setting goals of activities of each -,
B %dentifying alternatives of activities
> -esigning -ecision &ac"age
E Evaluating 0 #an"ing each -&
G Allocating #esources according to priority

2BB 4Cycle
Programmes B

2BB K-ecision &ac"ages
D (utually E5clusive
? %ncremental

2BB K-ecision &ac"ages

L