Month: September 2020

Budgets are developed round existing organizational structures and departments which may be inappropriate for current conditions and may not reflect the underlying economic realities. They may introduce rigidity and hamper creativity in the organization The budgetary system, perhaps because of Read More …

1 Imposed style of budgeting In this style, senior managers prepare budgets with little or no input from operating personnel or operational managers. The budget is then imposed on the employees who have to work with the budgeted figures. Imposed Read More …

Human behavior and budgetary planning and control An important feature in control in business is that control is exercised by the managers over people. Their attitude and response to budgetary planning and control will affect the way in which the Read More …

Budgets can be classified as follows Functional budgets Sales budget Production budget Material usage budget Material purchase budget Labour cost budget Cash budget   Sales budget This is a forecast of sales in a given period both in quantity and Read More …

A budget– is a formal expression of income and expenditure for a given future period. Budgeting– refers to the mechanism of preparing budgets. Budgetary control – refers to the process of comparing actual results with budgeted results and analyzing the Read More …

  Direct material cost variance: 1) Material cost variance = (actual price x actual quantity) – (standard price x standard quantity) 2) Material price variance = (actual price – standard price) actual quantity 3) Material usage variance = (actual quantity Read More …