Objectives of budgetary planning, Cost Accounting

Objectives of Budgetary Planning

1) Coordination

The budgetary process needs that visible detailed budgets are developed to cover every activity, function or department in the organization. It is only possible whereas the effort of one department's budget is concerned to the budget of another department. In this way, coordination of activities, department and function is achieved.

2) Communication

The full budgeting process includes liaison and discussion with all levels of management. Both horizontal and vertical communication is essential to ensure suitable coordination of activities.

3) Control

This is the process for comparing real results along with the budgeted results and reporting upon variances. Budgets set a control gauge that assists to accomplish the plans set in agreed expenditure limits.

4) Motivation

Budgets may be observed as a bargaining process whether managers compete along with each other for scarce resources. Budges set targets that have to be achieved. Where budgetary targets are tightly set, several individuals will be positively motivated towards achieving them.

5) Clarification of Responsibility and Authority

Budgetary process necessitates the organization of a business into responsibility and budget centers along with clear lines of responsibilities of each manager. This decreases duplication of efforts.

6) Planning

It is via Budgetary Planning that long-term plans are place into action. Planning includes determination of objectives to be attained at a future predetermined time. Whereas monetary values are attached to plans they become budgets.

Posted Date: 2/7/2013 3:08:26 AM | Location : United States







Related Discussions:- Objectives of budgetary planning, Assignment Help, Ask Question on Objectives of budgetary planning, Get Answer, Expert's Help, Objectives of budgetary planning Discussions

Write discussion on Objectives of budgetary planning
Your posts are moderated
Related Questions
Prepare a properly classified Cash Flow Statement for Sports Enterprises Ltd for the year ended 31st December 2011. Note that the Closing Cash at Bank Balance at 31st December 2011

(a)  The value of a share of Rio National Equity on 31 December 2002, using the Gordon growth model and the capital asset pricing model, can be determined as follows. Required


Unrecaptured Sec. 1250 Gain and 1231. Mr. Briggs purchased an apartment complex on January 10, 2011, for $2 million with 10% of the price allocated to land. He sells the complex on

F ixed Overhead Variance (FOV) Fixed overhead variance has been described by ICMA, London, as 'the variation between the standard cost of fixed overhead absorbed in the pro

Superior Door Company sells pre-hung doors to home builders. The doors are sold for $60 each. Variable costs are $42 per door and fixed costs total $450,000 per year. The company i


The balance sheet and income statement for Bingle Ltd is presented to you as follows: Balance Sheet Extract as at 30 June 2012 with comparatives

Determine the Single Limiting Factor A company manufactures and sells three products as A, B and C. The unit cost and revenue structure for every product and its maximum forec

Storage and Issue of Material A number of questions are relevant in this control of materials throughout storage and question of materials. These are as: a) Stock control r