Budgeting and Planning

Budgeting & planning is important for the operation of the business. Budgeting & planning helps to maintain the strategic planning for management of a company. Budgeting & planning is beneficial for continuous improvement and also help in anticipating problems.

Fixed Budget

A fixed budget is the financial plan designed and implemented by the management that is not changed or altered throughout the accounting and budgeting period. It remains same and uniform even if the level of activity changes within the business. However in actual situation

Profit Planning or Budgeting

Learning Objectives: Define and explain the terms “profit planning” and “budgeting”. What is the difference between planning and control? What are the advantages and disadvantages of budgeting? Contents: Definition and Explanation of Profit Planning and Budgeting Difference Between Planning and Control Advantages and Disadvantages

Zero Based Budgeting (ZBB):

Zero Based Budgeting (ZBB): Learning Objective of the article: Define and explain the term “zero based budgeting” and “incremental budgeting” in managerial accounting. Explain the importance and use of zero based budgeting in business. What are advantages and disadvantages of zero based budgeting? Contents:

Manufacturing Overhead Budget

Manufacturing Overhead Budget: Learning Objective of the article: Define and explain manufacturing overhead budget. Prepare a manufacturing overhead budget. The manufacturing overhead budget provides a schedule for all costs of production other than direct materials and direct labor. Example of a Manufacturing Overhead Budget:

Direct Labor Budget

Direct Labor Budget: Learning Objectives: Define and explain direct labor budget. Prepare direct labor budget. Definition and explanation of direct labor budget Example Definition and Explanation: The direct labor budget is developed from the production budget. Direct labor requirements must be computed so that