7 Advantages of flexible budget

Accounting treatment for provision, contingent liabilities and contingent assets as required by IAS 37.

A flexible budget is a budget that takes into account changes in sales volume and other cost driver activities.
The budget incorporates the effects on each cost and revenue as a result of the change in activity. It determines the variability of the cost along with the level of activity, which will be then used as a control tool. The aim of this budget is to control the cost. read more

5 disadvantages of zero-based budgeting

5 disadvantages of zero-based budgeting

Zero-based budgeting emerged in the late 1960s as a response to incremental budgeting. With zero-based budgeting, all budgets start at zero and activities/costs are only allowed if they are justified under investigation. All requests for resources must be presented and evaluated on the basis of cost-benefit. Zero-based budgeting is best suited to discretionary spending where there is no clearly defined input-output relationship such as in marketing, research and development, and training or public sector organization such as district councils. read more

plant Utilization Budget – meaning

Budget manual - meaning and content.

Plant Utilization Budget is budget  prepared for the estimation of plant capacity to meet the budgeted production during the budgeted period. It is a forecast of plant capacities available for fulfilling production requirements as specified in the production budget. This budget is expressed in working hours or other convenient units. read more

Short-term budgets – meaning

Short-term budgets - meaning

Short term budget – These budgets are usually prepared for a period of one year. Sometimes they may be prepared for shorter period as for quarterly or half yearly. The scope of budgeting activity may vary considerably among different organization. read more