budgeting 0.0 / 5 ? BusinessbudgetASOCR Created by: maisie twiggerCreated on: 26-11-13 16:06 budget a finacial plan to move towards the achievement of set objectives 1 of 11 historical budget departmental budgets drawn up by using past data, is quicker but doesnt encourage efficiency 2 of 11 zero based budget the budget is set at zero so departments have to justify why they need money, savings can be made nut it takes more time 3 of 11 types of budget 1.sales budget 2.production budget 3.purchases budget 4.labour budget 5.capital expenditure 6.cash budget 7.master budget 4 of 11 varience analysis varience= actual level-budgeted level 5 of 11 favourable the actual figure is better than planned, this should give the firm greater profits 6 of 11 adverse the actual figure is worse than planned, this would give the firm lower profits 7 of 11 what causes favourable variance wage rises lower than expected,extra sale, raw materials cheaper 8 of 11 what causes adverse variance competition, government increase rates, fuel prices increase 9 of 11 adavntages departmental co-operation, everyone is aware of costs, everyone can focus on objectives 10 of 11 disadvantages inaccurate and unrealistic can be ignored, may resrict business activity, can be difficult and time consuming 11 of 11
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