Legends of JHC SYBBI 09-10

Group 10 Presents

Budgetary Control

 A plan expressed in quantitative and money terms.  Income, expenditure, and capital to be employed.  Entire organization, department, sales territory, division, or for a significant activity.  Can include non monetary as well as monetary information in it.

Budgetary control
 The establishment of budgets.  Continuous comparison.  Monetary, numerical or non quantitative aspects.   Analysis.

Benefits and applicability
 Base for coordination and integration of various activities.   Measuring performance and comparing it against budgeted figures.  Conscious.  Democratic way of managing and control.

Some other terms
• The Budgeting process • The Budget period • Budget centers

Limiting Factor
• The limiting factor is anything that limits the activity of an entity. • Examples of limiting factor:1 Cash 2 Raw materials 3 Skilled labor 4 Land 5 Equipment • The budget that is prepared before all others. • There is no point in preparing every budget.

Case study
 Andy is a wholesaler of cricketing equipment: Andy's territory covers much of the South and East of England and his business is sufficiently large that he needs to consider each product line as its own revenue centre.  The weather will be hot and dry, and the demand for cricket bats will be high from June and for the rest of the season (until early September). After September, Andy will concentrate on his overseas business (selling to agents in India, Australia, New Zealand and South Africa).


J 950

J 950

A 750

S 600

O 600

N 500

D 600

Sales (units)

Stocks at the end of any month is to be set at the level of 100 bats plus 20% of the number of bats scheduled to be sold in the following month. Required For the seven month period June to December, prepare the stock and purchases budget and the sales budget: the selling price per bat is œ20 and the purchase price per bat is œ15.

Purchases budget : Cricket bats
J 290
Balance b/d Purchases

J 290 910

A 250 720

S 220 600 820 220 600

O 220 580 800 200 600

N 200 520 720 220 500

D 220 640 860 260 600


1240 1200 970
Balance c/d Sales

290 950

250 950

220 750

• • • • • www.business.fortunecity.com www.laynetworks.com www.tutor2u.net www.google.com www.ask.com

For case Study: • www.kraft.co.uk

• We would like to thank Professor Neha Shah for giving us a topic such as Budgetary Control which opened our minds and gave us an insight into how businesses prepare their budgets when they have some basic ideas of what they want to do. They prepare budgets to help themselves achieve those ideas; and then once they have done whatever it is that they wanted to do, they check to see if they kept to their budget.

Budget controlled By
ShafquatAzad Ashish Bansal Tejas Bartakke Himansh Chaprod Aamir Rangwala Arjun Tandon 02 03 05 09 46 58

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