Report on the different types of budgets that provide management accounting info
ID: 370437 • Letter: R
Question
Report on the different types of budgets that provide management accounting information that might be used by organisations. Prepare a list under the headings: 1. Title of report/budget. 2. Department/area to which the budget is applicable. 3. Primary function of the budget 4 Supported by data from which departments/area. 5. Users including those outside of management. identily and collect 10 samples of reports and budgets. Make a list of these reports/budgets, their primary function and the person or department for whom they are prepared. 80 marksExplanation / Answer
Department- Sales department
This budget represents the targets to be achieved by marketing department of business organization. This budget indicates the quantity and amount of sales to be achieved during the year.
Supported by data from production department
Department- Purchase department
The budget represents the target to be achieved by the purchase department. This budget indicates the quantity and amount of purchase to be made during budgeted period.
Supported by the data of Administrative department
Department- Production department
This budget represents the targets to be achieved by the production department of business organization. This budget indicated the quantity to be produced during the budgeted period.
Supported by the data of Purchase department
Department- Human resource department
This budget represents wage cost to be spent during budgeted period on budgeted production. From this budget, we are able to identify the reasons for increase and decrease in labor cost. In this Budgeted wages are requires to be compared with actual wages for calculating variances.
Department- Finance department
Cash budget is the forecast of estimated cash receipts and estimated cash payments during the budgeted period. Cash budget is different from cash account and cash flow statement in the sense that cash budget is future oriented whereas cash account and cash flow statement is related to the past period.
Supported by the data of Human resource department, purchase department, sales department, Administrative department, Marketing department