Budgeting and Forecasting

To help managers plan and control the organizations performance

Fixed Budget

Forecast outturn is an estimate of expenditure made before the Appropriation Accounts have been prepared.

well its pretty simple you type in 80000 and then you hit that nice divide button and you hit the enter button that's usually how you find an answer you idiot

Expenses are things that cost a person money on a regular basis. Some examples of expenses are, electric bill, car payment, clothes, and food.

The costing department advises the management to take decisions based on the cost efficiency and capability. The administrative department relates to daily activities like financial planning, billing, record-keeping, personnel, etc. ,

operating budget pays for day-to-day expenses, like salaries of a state employee and capital budget pays for major capital, or investment, spending, like building a bridge the money comes from there.

expenses

participative budget is also called bottom-up budget.

So, u just find the disadvantages of bottom-up budget.

1. slow

2.budget snack

3. Not setting budget in line with the aim of the firm

behavioural implications of budgeting are, budgetary slack and participative budgeting. budgetary slack tends to happen when the manager of division wants their performance looks good, but in the wrong way by padding the budget. therefore, they looks like "beat the budget". participative budget can cause delay andvacillation.

It is necessary to develop a pro forma income statement, pro forma balance sheet, and cash budget.

Budget is useful when you are running out of money and have to cut spending.

A traditional budget is often referred to as a "static budget." A static budget is not designed to change with changes in activity level. Once sales and expenses are estimated, they become the relevant benchmarks.

A flexible budget is an alternative that has some compelling advantages. It relates anticipated expenses to observed revenue. To illustrate, if a business greatly exceeded the sales goal, it is reasonable to expect costs to also exceed planned levels. After all, some items like cost of sales, sales commissions, and shipping costs are directly related to volume. How ridiculous would it be to fault the manager of the business for having cost overruns? Conversely,

failing to meet sales goals should be accompanied by a reduction in variable costs. Certainly it would make no sense to congratulate a manager for holding costs down in this case! A flexible budget

is one that reflects expected costs as a function of business volume; when sales rise so do certain budgeted costs, and vice versa.

The flexible budget responds to changes in activity, and may provide a better tool for performance evaluation. It is driven by the expected cost behavior. Fixed factory overhead is the same no matter the activity level, and variable costs are a direct function of observed activity. When performance evaluation is based on a static budget, there is little incentive to drive sales and production above anticipated levels because increases in volume tend to produce more costs and unfavorable variances. The flexible budget-based performance evaluation provides a remedy for this phenomenon.

To calculate the unit selling price given total sales revenues, divide the total sales revenues attributed to the particular good or service for which unit selling price is desired by the number of units sold.

False

The Actual overhead is calculated throughout the Production cycle for indirect cost associated to the production and the overhead costs applied is based on the fixed rate assigned against the machine or labour hours to be calculated for the difference b/w two are called under or over applied.

in marginal costing key factor and limitation factor is also available which may put limits on produduction unit and sales unit.

You have to evaluate all of your resources and all of the costs.

You need to know what you need to buy and how much it costs. A complete budget will list all of the costs for food, shelter, clothing, insurance, health care, vehicles, entertainment and all other needs.

Then you have to determine how much you have to spend and allocate it to the various bills. If you have more bills then you do money, you are living above your means and need to find less expensive alternatives.

capital budgeting decisions

capital structure decisions

its so good

What so good?

If any one can answer this question please answer it

IRR

to keep a set of books for business with an information system that provides reports to users about the economic activities and condition of a business.

Unit Fixed Cost and Total Variable Cost

Kenny Kalejaiye