It has the capability to provide a number of advantages as provides better

It has the capability to provide a number of

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It has the capability to provide a number of advantages, as: provides better control over cash flow. Shows financial viability of new ventures Measures financial performance Lower financial risks Determine future cash requirements. 3. a. What does budgetary control mean? (2 marks) Budgetary control is a process for managers to set financial and performance goals with budgets, compare the actual results, and adjust performance, as it is needed. b. Describe the steps in any budgetary control process that managers should follow. (4Marks) First step: a budget needs to be created. A company performance budget is a set of financial goals that management wants to achieve. These could be sales or spending goals; Second step: management needs to compare, analyse, and interpret the actual performance results with the budgeted goals; Third step: managers need to improve the underperforming operations and continue to strengthen the favourable ones; Fourth and final step: usually occurs at the end of an accounting period. After management has a chance to look over the entire last period, they can start making plans for the next year. They should most likely review the original budget that was created and why certain goals were set. Then they will compare the actual with the budgeted performance over the entire period. Lastly, management will focus on how they tried to correct the problem operations and develop a plan to fix them in the next period.
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4. Why is it important to identify budget variances and report variances to designated stakeholders? (2 marks)
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  • '16
  • dsa
  • Brokman Company

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