Managerial Accounting

Running head: MANAGERIAL ACCOUNTING
Managerial Accounting
Name of the Student
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1MANAGERIAL ACCOUNTING
Executive Summary:
The current report is based on understanding the concept of budget. The report would place
focus on the master budgets and the elements that are involved in the master budget. An
explanatory statement would be accompanied regarding the top down budgeting approach
and the bottom down budgeting approach and selecting the best approach for AGL Energy
Ltd as the selected company for the report. Finally, a budgeted income statement for the
financial year of 2019 would be produced to project the growth of business. A conclusive
evidence for the analysis would be presented to accompany the best suitable choice of
budgeting approach for the AGL Energy Ltd.

2MANAGERIAL ACCOUNTING
Table of Contents
Introduction:...............................................................................................................................3
Explanation of Elements of Budget:..........................................................................................3
Elements of Master Budget are as follows:............................................................................4
Comparison of Top Down and Bottom Up approach to budgeting procedure:.........................8
Top Down Budgeting in AGL Energy Ltd................................................................................9
Budgeted Income Statement of AGL Energy Ltd for 2019:....................................................11
Comparative data analysis of Actual and Budgeted Income Statement for 2018 & 2019:......11
Conclusion:..............................................................................................................................12
References:...............................................................................................................................14

3MANAGERIAL ACCOUNTING
Introduction:
The procedure of preparing and using budgets generally differs from company to
company. There are several important requirements in designing of budget planning and
control procedure. Budgeting acts as the means of co-ordinating the overall business
activities. While preparing the budgets there are numerous factors such as production
capacity, possibilities of sales, procurement of material and labour are balanced and co-
ordinated in a manner where all the activities are in respect of the objectives (Wildavsky,
2017). As a result of this budgeting committee is created that includes all the heads of
departments for solving a common problem. The necessity for co-ordinating the procedure of
planning is enormous.
The interrelation among the functional budgets represents that the budget cannot be
completed without referring to several others. Managers that are performing their job on day
to basis are most likely to create a better idea of what is attainable that is most likely to take
place in the upcoming period, local trading conditions (Rubin, 2015). The budget holders are
more likely inclined towards working a budget in which they are involved.
The present report is based on providing an explanation to the elements of master
budget. The report would also accompany a comparative analysis of the top down and bottom
up approach to the process of budgeting. Following the comparative analysis of the company
top down and bottom down approach the report would also provide a suitable discussion
regarding the application of either of the budgeting procedure in AGL Energy Ltd as the
chosen company for this report.
Explanation of Elements of Budget:
Master Budget