2 antony robertn and reece jamess management

Info icon This preview shows pages 185–188. Sign up to view the full content.

2. Antony Robert.N And Reece, James.S Management Accounting Principles Tata McGraw Hill 3. Oswal, Maheshwari, Modi Cost accounting. Cost Accounting ( RBD, Jaipur) 4. Pandey. I. M. Management Accounting (S. Chand & Sons.) 14.11 LEARNING ACTIVITIES Visit any organization which is nearby you and availing permission from the finance department Observe how the budgetary control system is installed by considering all important requirements of the Budgets. 14.12 KEYWORDS Budgetary Control, Planning, Coordination,, Control, Budget Centre, Budget Officer, Budget Manual, Budget Committee, Intensity, Standard Costing, Budget Period.
Image of page 185

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

179 LESSON 15 TYPES OF BUDGETS 15.1 INTRODUCTION The budgets are classified according to their nature. The budgets may be classified according to function, flexibility, time. Functional budget is one which relates to a function of the business. Flexible budget is one which is designed to change in relation to the level of activity attained. On the basis of time, the budget can be classified as Long term budget, Short term budget ,Current budget ,Rolling budget . 15.2 OBJECTIVES After completing this Lesson you should be able to know Classification of Budgets according to Function, Flexibility and Time Preparation of different types of Budgets Advantages and Disadvantages of Budgetary Control 15.3 CONTENT 15.3.1 Types/Classification of Budget 15.3.2 According to Function 15.3.3 Classification according to Flexibility 15.3.4 Classification according to Time 15.3.5 Advantages of Budgetary Control 15.3.6 Limitations of Budgetary Control 15.3.7 Preparation of Budgets 15.3.1 TYPES/CLASSIFICATION OF BUDGETS Budget can be classified into three categories from different points of view. They are: 1. According to Function 2. According to Flexibility 3. According to Time 15.3.2 ACCORDING TO FUNCTION Sales Budget The budget which estimates total sales in terms of items, quantity, value, periods, areas, etc is called Sales Budget. Production Budget It estimates quantity of production in terms of items, periods, areas, etc. It is prepared on the basis of Sales Budget. Cost of Production Budget This budget forecasts the cost of production. Separate budgets may also be prepared for each element of costs such as direct materials budgets, direct labour budget, factory materials budgets, office overheads budget, selling and distribution overheads budget, etc.
Image of page 186
180 Purchase Budget This budget forecasts the quantity and value of purchase required for production. It gives quantity wise, money wise and period wise particulars about the materials to be purchased. Personnel Budget The budget that anticipates the quantity of personnel required during a period for production activity is known as Personnel Budget Research Budget This budget relates to the research work to be done for improvement in quality of the products or research for new products.
Image of page 187

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 188
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern