ACC2005 Management Accounting: Budgeting, Technical and Non-Technical

This report provides a detailed analysis of budgeting in management accounting, covering both technical and non-technical aspects. It begins with a practical application of budgeting, presenting a sales and purchase budget for a nine-month period, including calculations for cash sales, credit sales, cost of goods sold, and materials to be purchased. The report then delves into the technical aspects of budgeting, emphasizing the importance of accurate analysis and estimation. Furthermore, it explores the non-technical dimensions, such as satisficing, political influences, and budget ploys. The report concludes that budgeting is not limited to expense estimation but extends to predicting profits and income, highlighting the crucial role of professional expertise and the interplay of technical and non-technical elements in effective budgeting.

Running head: MANAGEMENT ACCOUNTING
Management accounting
Name of the student
Name of the university
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Author note

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Table of Contents
Part 1..........................................................................................................................................2
Report view............................................................................................................................2
Formula view.........................................................................................................................2
Part 2..........................................................................................................................................3
Introduction............................................................................................................................3
Technical aspect of budget.....................................................................................................3
Budgeting as non-technical process.......................................................................................3
Conclusion..............................................................................................................................5
Reference....................................................................................................................................6

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Part 1
Report view
Sales Budget: March
Quarter June Quarter September
Quarter
Nine Month
Total
Cash Sales 20000 65000 43456 128456
Credit Sales 97500 56456 76000 229956
Total Sales 117500 121456 119456 358412
Budget for the nine months ended 30 September
Purchase Budget: March
Quarter June Quarter September
Quarter
Nine Month
Total
Cost of goods sold 70,500.00 72,873.60 71,673.60 2,15,047.20
Add: Ending Inventory 56,862.08 56,502.08 56,600.00 1,69,964.16
Total Requirement of
Materials 1,27,362.08 1,29,375.68 1,28,273.60 3,85,011.36
Less: Beginning Inventory 47,890.00 56,862.08 56,502.08 1,61,254.16
Materials to be purchased 79,472.08 72,513.60 71,771.52 2,23,757.20
Formula view

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Part 2
Introduction
Budget is the allocation of resources for some specific purposes. Budgeting is always
considered as the part of the business activities however the modern budget is not limited to
expenses only but also it is used for predicting profits, income and return from the investment
for future period. Unless the process of budget is managed through usage of exceptional skills
and experience the outcome of the budget can be negative (Chen, Weikart and Williams
2014)
Technical aspect of budget
Work of the budget as well as the budget work involves different techniques to be
applied for the purpose of analysis and to present the outcome of the analysis formally. It
further involves different numbers and making the estimation through those numbers.
Technical aspect is critical while constructing the budget request program at department level
as well as agency level (Dudin et al. 2015). At these levels of procedure the technical analysis
shall be described fully as well as accurately the public demand for the services and resources
required for each of the fund or program. To be stated in simple way, careful workmanship
by the professional assists in assuring that the accounting information regarding demand for
the services in association with available resources (Rendra and Cendekia 2015)
Budgeting as non-technical process
Satisficing is the strategy for decision making the main objective of which is to
generate adequate or satisfactory result rather than generating the optimal solution. Instead of
putting maximum effort for obtaining most ideal result, satisficing concentrates on the
sensible effort while confronted with the task. Under management aspect the satisficer is the

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opposite of perfectionist. The satisficer managers generally work on exceptionally tight
schedule and the budget as they do not spend the resources for maximising the services,
products or solution to neglect of bottom lines and deadlines (Zhao and Huang 2016). On the
contrary, the perfectionistic manager may find himself strived over the decision in the way
that provides excellent solution but with the slower pace and with higher budget.
Budget is one of the most significant policy documents of the government. It provides
details regarding how government distributes the resources to various sectors like public
safety, defense needs, education, health care and infrastructure. These functions compete for
the government’s attention as well as funding from the government. Limited resources of the
government requires the decision regarding what programs and policies to be funded and at
what level (Chohan and Jacobs 2017). The process of decision making is therefore inherently
political that makes the budget process a political document. Political is procedure to decide
who will get what, how and when. Process of budget goes to hear of the political questions as
the government officials take decisions regarding who will get how much of funding for what
purpose and how the initiatives shall be funded. Though the economic projections, forecasts
and analysis of the government expenditures and revenues help is shaping and informing the
budgeting activities of the government, the outcome is ultimately determined by the political
preferences (Chohan and Jacobs 2017).
Since the development of budget concept, budgetees are there who are engaged in
different activities those are called as ploys for assisting in improving the chances of
achieving the desired resources. On the other hand the supervisors who are engaged into their
own ploys try to prevent the wasteful or inappropriate use of the resources (Ebdon and
Franklin 2015)

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Hence, it can be stated that apart from the technical aspects of budget process, various
non-technical aspects of budgets process are also there including budget ploys, political
process and satisficing.
Conclusion
From the above it can be concluded that budget is not only used for estimating the
expenses only but also is used for predicting profits, income. Technical aspect of budget is
critical while constructing the budget and careful workmanship and experience of the
professional assists in assuring that the accounting information regarding demand for the
services in association with available resources. Further, in addition to technical aspects, non-
technical aspects involved with are budget ploys, political process and satisficing.

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Reference
Chen, G.G., Weikart, L.A. and Williams, D.W., 2014. Budget tools: Financial methods in the
public sector. CQ Press.
Chohan, U.W. and Jacobs, K., 2017. Public value in politics: A legislative budget office
approach. International Journal of Public Administration, 40(12), pp.1063-1073.
Dudin, M., Prokofev, M., Fedorova, I., Frygin, A. and Kucuri, G., 2015. International
Practice of Generation of the National Budget Income on the Basis of the Generally Accepted
Financial Reporting Standards (IFRS). Asian Social Science, 11(8), pp.119-126.
Ebdon, C. and Franklin, A.L., 2015. Democracy, public participation, and budgeting:
Mutually exclusive or just exhausting?. In Democracy and public administration (pp. 96-
118). Routledge.
Rendra, M. and Cendekia, I., 2015, May. The national budget transparency initiative at
ministry of finance in open government data. In 2015 3rd International Conference on
Information and Communication Technology (ICoICT) (pp. 522-527). IEEE.
Zhao, C.L. and Huang, H.J., 2016. Experiment of boundedly rational route choice behavior
and the model under satisficing rule. Transportation Research Part C: Emerging
Technologies, 68, pp.22-37.