What is a static planning budget? A static budget is a budget that does not change as volume changes. If a company’s annual master budget is a static budget, the budget for sales commissions expense will be one amount such as $200,000 for the year. In other words, in a static budget the budgeted amount for sales commissions expense will remain at $200,000 even if the actual sales during the year are $3 million, $4 million or $5 million. 9–2 What is a flexible budget and how does it differ from
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case study Case study pages • 1: What is a budget? • 2: Kraft´s income and expenses budget • 3: The importance of feedback • 4: Constructing an expense budget • 5: Advantages and disadvantages of expense budgeting • 6: Alternative types of budgeting • 7: Conclusion Read more: http://businesscasestudies.co.uk/kraft-foods-uk/budgeting-and-strategy/conclusion.html#ixzz1nUCFRFJb What is a budget? A budget is a financial plan that sets out, using figures, an
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PART I 1) The effects of the new computerized system The computerized manufacturing system will have deep impact on manufacturing processes and costing. The new system may affect the manufacturing processes by slowing them down like Anh Tran is afraid. As it requires training and reorganizing and will take time for employees to fully get used to it, the production line will be delayed and might not reach the budgeted target. The manufacturing costs will certainly increase as depreciation cost
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accountant is to produce a budget. Explain why this is done and the type of information it should contain. A budget is a detailed plan for the acquisition and use of financial and other resources over a specified time period, which is prepared in advance by using past data (Seal, et al., 2015, p.462). Before starting to produce budgets, the organisation ought to ensure its overall strategic goals. To achieve these goals, firstly, its management accountant should create various budgets to reflect its expected
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Page 2 of 20 EXECUTIVE SUMMARY This paper begins with an exploratory view of what budget is all about. In principal, the budget has been useful in providing a list of financial explanatory information for the top management in organisations to plan and control the organisation’s actual performance against the prediction. In general, budgeting process appears to be a favourite in blueprinting the business operations. In the course of converting objectives and goals into useful data for the
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approaches that may be used to develop the budget. Managers typically prefer an approach known as participative budgeting. Discuss this form of budgeting and identify its advantages and disadvantages. Ans. Also called bottom-up budgeting or self-imposed budgets, where the initial flow of budget data moves from lower levels of responsibility to higher levels of responsibility. Each person with responsibility for cost control will prepare his or her own budget estimates and submit them to the next
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SUMMARY OF CHAPTER 9 BUDGET PREPARATION Nature of Budget Budgets are an important tool for effective short-term planning and control in organization. An Operating Budget usually covers one year and states the revenue and expenses planned for that year. It has certain characteristics like: * A budget estimates the profit potential of the business unit. * It is stated in monetary terms, although the monetary amounts may be backed by the non-monetary items like units produce and sold.
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loss of confidence in the PFMS resulting in increasing volumeof transactions taking place outside normal PFMS.The United Nations Executive Committee Agencies (EXCOM) adopted a common operation called theharmonized approaches to cash transfer framework for transferring cash to
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facilitates decision-making, and provides a framework for monitoring and for performance evaluation. All managers are responsible for preparing a budget. Since specific departments play important roles in improving various components of the balance sheet and the income statement, it is critical that they prepare their budgets in a responsible way. Once budgets are in place it is necessary to analyse the difference between the actual and budgeted costs (variance). A variance analysis involves the decomposition
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and Controlling Finances JET Task #2 Competition Bikes, Inc. Budget Process Budgets are used for forecasting future business growth and outcomes. Providing a comparison between a forecasted budget with previous year’s actual results allows leadership to strategize and plan for the company’s future on past performance. Producing a master budget roadmap for future operations may be done in two ways--by using fixed budget or flexible budgeting processes. There are advantages and disadvantages
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