ACC2005 Management Accounting: Budgeting and Budgetary Control Report

This report provides an overview of budgeting and budgetary control within the context of management accounting. It discusses the technical and non-technical aspects of budgeting, highlighting the use of tools and techniques for estimating future incomes and expenses, setting performance benchmarks, and analyzing actual performance against those benchmarks. The report also touches upon the qualitative requirements of management accounting information and its role in decision-making and controlling processes. Additionally, it mentions other management tools such as standard costing, marginal costing, and CVP analysis. The conclusion emphasizes the importance of budgeting as an advanced tool for setting targets, analyzing performance deviations, and guiding corrective actions in any organization. Desklib offers a wealth of resources, including solved assignments and past papers, to further support your understanding of these concepts.

MANAGEMENT
ACCOUNTING
Budget and Budgetary
Control

INTRODUCTION
 Budget is the process of estimating the
future incomes and expenses based on
some historical data and analyzing the
actual performance to identify any
deviation and to take certain
corrective actions. It is a part of the
business planning and strategy
building process. It helps in estimating
the future incomes and expenses, and
to apply a control over the actual
performance of the business.

TECHNICAL ASPECT OF THE
BUDGET
 The technical aspect of the budget means
application of various tools and techniques
for estimation and forecasting of the
future incomes and expenses. It also sets
a benchmark for the performance or a
target for the company to be achieved in
near future by their business activities.
 After the actual work has been performed,
it analyses the actual performance in
comparison with the benchmark as set in
the budget.

NON-TECHNICAL ASPECT OF
THE BUDGET
 The non-technical aspect of the budget mainly
addresses the qualitative requirement of the
management accounting information.
 It helps the management in decision-making
and controlling process by providing adequate
cost and management information.
 It is has a great importance on the
management of the business and achieving the
overall objectives of the business
organizations.
 It must be applied with due care and in
accordance with the functionality of the
business organization

OTHER MANAGEMENT TOOLS
There some other management
and evaluations tools which can
be applied in a business
organization. Such as.
Standard Costing
Marginal Costing
CVP Analysis

CONCLUSION
 Budget is an advanced tools of cost and
management accounting, which can be
applied in every organization to set
benchmark and targets for their future
course of actions and when the actual
work is performed it can help in analyzing
the actual performance.
 It helps in detecting any deviations in
actual performance and suggests in taking
corrective actions. Therefore, its scope
cannot be limited to the political aspect
only.

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