Name: 1.

Nurlyta Fauziyah (C1C018113)

2. Yuli Mulyani (C1C018130)
3. Efrida Juliana Manalu (C1C018103)
4. Alifia Nur Diyanah (C1C018121)

1. Who is involved in the process of making the master budget and explain their respective
roles and if the master budget is revised, what is the procedure?
The budget committee reviews the budget, provides policy guidelines and budgetary
goals, resolves differences that arise as the budget is prepared, approves the final
budget, and monitors the actual performance of the organization as the year unfolds.
The president of the organization appoints the members of the committee, who are
usually the president, vice presidents, and the controller. The controller usually serves
as the budget director, the person responsible for directing and coordinating the
organization’s overall budgeting process.
Budget revision procedure (1) Determine the problem or error (2) Asking for responses
from various divisions or employees about the error. (3) Gather the opinions of experts
or managers for the application of the adjusted budget
2. Explain how a good budget is to obtain a lot of information so that the decisions made
by managers can be effective:
In preparing budgets, companies pay attention to aspects of control and planning.
A company's budget is made by looking at the company's historical data in the previous
period. By evaluating (controlling) so as to determine a budget that is considered more
effective and efficient in the coming period. A good budget contains planning data for
company activities, and possible threats in the future. So, if later the company
experiences losses that are not too large or even able to overcome the threat.
In addition, before preparing a budget the company has made a strategy, therefore the
budget must be able to support the company's strategy so that the company's goals can
be achieved efficiently and effectively.
3. Explain why mixed costs must be divided into fixed and variable components before
flexible budget can be developed?
Mixed costs consist of fixed and variable components that affect the cost calculation of
various levels of output. the pattern of cost behaviour of each item in the budget really
needs to be known. So that the calculation of costs can be identified which are variable,
fixed, and mixed
4. In an era of budget cuts, across the board cuts more harm to good programs than bad
ones. What do you think ? Do you agree? What approach is recommended? And why?
Agree. Budget cuts will adversely affect the government's strategic policies because the
running of government programs will be hampered.
 Budgetary wastage by the government where official travel gives a large proportion in
the ministry / agency budget. Many programs that do not directly intersect with
national objectives are run inefficiently. This is based on the wrong perspective that the
effectiveness of the use of the budget is seen from the absorption of the budget of the
ministry / agency concerned. In addition, the budget cuts are indicated from the
information that there are funds settling from each region that can be used to carry out
regional operations.
In implementing fiscal policy instruments, it can also boost the economy without
cutting, because sudden cuts in the budget give shock to government officials, especially
at the regional level.
State revenue can be boosted by revaluating assets in SOEs so as to increase tax
revenue. Repatriation of funds from foreigners through a tax amnesty policy must of
course be promoted as an effort to increase tax revenue.
5. Try to explain what the situation is so that the budgetary slack and padding budget
appear ?
Budgetary slack (budgetary slack) or closing the budget (padding the budget) is a
problem that occurs in participatory budgeting. This problem arises when a manager
estimates low income or raises costs deliberately. So, the budget set by the lower level
manager exceeds the budget standard or does not reach the set budget standard. This
can happen, when a lower level manager prepares a budget that is too high or too tight
in order to achieve company goals. The solution used to overcome this problem is that
top management is careful in reviewing the budgets of lower-level managers, and also
the management provides input to allow for slack in the budget.
6. How can the formal budgeting system help get out of financial problems?
The formal budgeting system can draw up a company's work plan to carry out control
of various company activities as a whole. Thus, a formal budget is a management tool
that can be used both for planning and controlling purposes, both financial problems
and other problems.
7. What does your group think about the statement that many small scale businesses do
not prepare their business budgets? And according to you, what is the reason they
don't want to draw up a budget ?
Smaller businesses generally do little or no budgeting for their company. Even many
larger businesses don't budget - at least in a formal and comprehensive manner.
A couple of reasons that some businesses avoid the process of budgeting are because
some businesses are in relatively mature stages of their life cycle or operate in a mature
and stable industry and a business may be in a very uncertain environment, where
attempting to predict the future seems pointless.
Although many businesses don't prepare budgets, they still establish fairly specific goals
and performance objectives that serve as good benchmarks for management control.
Even in a business that doesn't do budgeting, managers depend on regular profit
reports, balance sheets, and cash flow statements. These key internal financial
 statements should provide detailed management control information. These feedback
reports are also used for looking ahead and thinking about the future. Other specialized
accounting reports may be needed as well.
8. Explain Under what conditions do the two types of control, static control and flexible
control be applied? And how does this affect the behavior of members of the
application of both types of control? And why does a manager have an incentive to
make budget leeway? (Group 5)
A static budget is formulated as a budget that is prepared for only one stage of activity
(for example sales volume). To illustrate: a general master plan budget is a plan that is
adjusted to one target volume level, for example 100,000 units. All results achieved will
be compared with the original plan, without regard to changes in conditions that occur.
Although for example the volume achieved was only 90,000 units and not 100,000 units
as previously planned.
Flexible budgets are made for a range of activities, not just for one level of activity, and
in essence are a series of budgets that can be adjusted at different levels of activity.
Ideally, a flexible budget is prepared after we have a detailed analysis of how each cost
is affected by changes in activities.
9. What is the difference between a static activity budget and a flexible activity budget and
when and how it is applied. (Group 9)
Static budget is a fixed budget for production with a specified number of units of
output. A static budget is created at the beginning of a period for a future period, which
contains sales budget, production budget, until the budgeted balance. Flexible budget is
a budgeting report that is made to estimate the amount of revenue and costs that
should be, at the actual (actual) level of certain activities during the period. So that
managers know the actual and expect activities that occur in one period. Usually a
flexible budget is made at the end of the period or is flexible with the activities of the
company's activities. Flexible Budgeting is knowledge of fixed and variable costs:
budgeting for the expected level of activity and Budgeting of the actual level of activity.