ACC2005 Management Accounting: Budgeting Process Analysis Report

This report provides a comprehensive analysis of budgeting within the context of management accounting. It begins with an introduction to the concept of budgeting, emphasizing its role in resource allocation and financial forecasting. The technical aspects of budgeting are explored, including the application of various techniques for analysis and estimation, highlighting their critical importance in constructing budget requests at departmental and agency levels. The report then delves into non-technical aspects, such as satisficing in decision-making, budget ploys, and the inherently political nature of the budget process. It emphasizes how political preferences and external factors influence budget outcomes, despite the use of economic projections. The conclusion summarizes the key findings, reiterating the significance of both technical expertise and an understanding of non-technical influences in effective budgeting. The report underscores that budgeting is used not only for expense estimation but also for predicting profits and income. The report is prepared for the ACC2005 unit and covers the application of product costing to real-world management accounting contexts. The report also includes the use of credible sources to support the information.

MANAGEMENT
ACCOUNTING
N a m e o f t h e s t u d e n t
N a m e o f t h e u n i v e r s i t y
S t u d e n t I D

IN
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

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

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

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 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.

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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

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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

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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
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.

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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.

THANK YOU
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