Steps of Preparing a Budget for Companies

Running head: QUESTION 1
ENGINEERING ECONOMIC ANALYSIS
Student details:
6/8/2019

QUESTION 2
Various companies make budgets, which they use as the process of comparison while assessing
the actual outcomes over the upcoming period. The procedure of making the budget must be
greatly disciplined as well as adopt the set schedule, so that the accomplished budget is prepared
for utilize through the starting of the subsequent fiscal year (Ingga, 2016). Following are the
steps of preparing the budget-
1. Revise the assumption related budget- the first step is to review the assumption in relation
to business atmosphere of organization, which were utilized as basis for previous budget,
as well as revise according to the requirement.ng
2. Evaluate bottlenecks- measure the level of capacity of primary bottleneck, which is
restraining the organization from producing more sales, and describe how it will
influence the extra revenue growth of company.
3. Accessible financing- assesses the finance amount, which would be available at the time
of budget period that can restrict the development plan.
4. Step costing point- assess whether the step costs would be occurred during a probable
range of actions related to business in a future budget period.
5. Make budget packages- Copy forward fundamental budgeting instruction from
instructions packet utilized within last year. Further upgrade this by involving year-to-
date real expenditures occurred in present year, and also annualizes the data for whole
present year. Add a explanation for a packet (Arthur, 2016).
6. Issue budget package- individually issue budget package, wherever probable, and reply
the queries from the recipient.