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Product Cost and Budgetary Control Methodologies and Systems - Essay Example
Finance & Accounting
Pages 7 (1757 words)
Support Systems Name: Institution: Instructor: Subject: Date: Introduction A budget is a recorded plan of action. It a statement that contains the projected results in financial and non-financial basis over a period of time. The budgetary information assists managers to plan, control and to even coordinate business activities…
The budgetary control systems controls costs through the preparation of budgets, comparing actual performance with the budget. This allows the managers to act upon the budget and results in order to attain maximum profitability (FAO, 2010). Over the last two decades the computer world is changing how companies operate and report. The need to incorporate computerized systems in every business aspects is still ongoing research. Budget information systems and product cost systems are analysed in this report, their benefits and challenges they pose. The product cost and budgetary control methodologies and systems There are two budget control methodologies i.e. the budgets and the budgetary control. The budget is the formal statement that represents the projected financial resources that are needed to undertake business activities. Budgetary control on the other hand is a technique and a tool that is used by management to compare the budget with the actual performance. Any discrepancies are then acted upon either by revising the budget or exercise control action. The budget information system (BIS) BIS has been in use for the last 25 years having been used for budgetary needs in schools, cities and even countries. BIS integrates all the budget functions into one single application. ...