Managing Finance and Budgets

Seminar 10

Questions 1

Describe the different forms of budgeting Describe briefly the main steps in the budgetary control

process. Describe the relationship between the budgeted profit, the

variances (favourable and adverse) and the actual profit. Describe the ‘learning curve’ as it applies to the time

taken for a company to produce one level of output as the level of output grows.

Incremental Budgets

Zero-Base Budgets

Activity-Based Budgets

Standard Costs

Different Forms of Budgeting

The budgetary control process

Prepare budgets

Perform and collect information on actual performance

Respond to variances between planned and actual

performance and exercise control

equals

minus

Actual profit

plus

All adverse variances

All favourable variances

Budgeted profit

Relationship between the budgeted and actual profit

The learning curve effect

Time taken

per unit of

output

Cumulative units of output