How does management use an operating budget How do they use an activity based budget What are the similarities and differences between these types of budgets?

Answer 1

The key to a successful financial reporting system is an operating budget in order to compare your actual operating results. Managers use the operating budget for planning in setting goals and developing strategies to achieve those goals. Budget will demonstrate how resources will be developed to implement strategy. Managers use the operating budget for strategy, long-run planning strategic plans, long-run budgets, short-turn planning operating plans, and short-run budgets. The operating budget will aid management for a specific period and [b] an aid to coordinating that needs to be done to implement that plan.