Finance - Budgeting - Assignment Example

Only on StudentShare

Extract of sample
Finance - Budgeting

A comparison of the actual and budgeted costs should be closely monitored to determine the efficiency of the system in place. If the current technique does not always reflect the true cost of operation or reports wide gaps between budgeted and actual costs, a change in technique could be a solution.
The company has been employing process costing to budget and monitor its various costs. This method is a widely used tool in costing of its products. In order to do this, the company recognizes the following cost pools:
The production budget of the company is set before the production period usually for one year. Traditional costing method and variance analysis are used to adjust the different costs incurred. At the end of each quarter, the company computes the different variances to determine whether the company is above or below the set level. However, no effort is made to correct the budgeted costs.
As the size of the company is relatively small, it currently doesn't employ any software in order to efficiently track costs. The data for production is gathered for each pool center manually and is sent to each department involved such as purchasing, billing, and inventory.
It is also apparent that the company has no formal monitoring system as the budgets are never adjusted. It should be noted that the price of materials being used by the company often vary with their availability. ...Show more


Falling to plan is planning top fail" is a very famous adage highlighting the significance of budgeting for business organizations. It is irrefutable that this saying is still very much applicable in the 21st century as business organizations are operating in a hypercompetitive environment…
Author : froberts
Save Your Time for More Important Things
Let us write a custom assignment on your topic
"Finance - Budgeting"
with a personal 20% discount.
Find out more

Related Essays

Performance Management: Beyond Budgeting
Needless to say, the last thing an organization would like to do in such a scenario would be to waste the funds given them – and along with it, the trust of its stakeholders. An organization without any money is essentially paralyzed, and will not be likely to hold out long before it keels over and dies.
10 pages (2500 words) Essay
Budget Process (finance)
It is claimed that budgetary control has almost become a necessary tool for the management to control the costs and enhance profitability. But the changing time is so competitive in business and other activities that many times changes in activities occur so fast that relevance of budgets and budgetary control look useless, as with frequent changes the budgetary prediction often look unreal.
4 pages (1000 words) Essay
Capital Budgeting Bachelor Essay
The second example was a situation in which a company abandoned an in-house testing program in favor of a free assessment program offered by state employment services using the General Aptitude Test Battery. Hunter et al. assumed that such a strategy would improve test validity (and hence utility) while reducing cost.
7 pages (1750 words) Essay
Capital Budgeting Statistics Project
All these decisions involve huge investment, the benefits of which will be seen only in the long-term and these decisions are also irreversible in nature. By nature of these projects, long-term sources of funds become the best suited means of financing.
21 pages (5250 words) Statistics Project
Europe debt problem/ responses for 2013/14
recently have suffered a heavy sovereign debt downgrade, default fears, and a sharp rise in the cost of borrowing, which are the types of developments that threaten other economies within the euro zone and the future of the euro. The euro zone crisis cannot be compared to the
3 pages (750 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email