Budget Information

Question 1

In 100 words or more reply to the statement below about budgeting

• All budgets need to be driven off of the operational strategy of the company. Budgets are crucial for efficient operations. This paper mentions that many companies waste a lot of time preparing budgets while not really making great use of them for planning purposes throughout the year. This can be attributed to a lot of things, including the inefficiencies within the budget preparation process. For those utilizing spreadsheets for budgets, spreadsheets aren’t dynamic enough to allow for efficient use of budget information. Applications that operate as multidimensional models are much better as they allow for budget information to be stored in a way that can easily be queried should a manager want to run different scenarios on that data. Ultimately, the more efficient the budgeting process, the more useful the information is to management.

Question 2

Answer the following questions

Evaluate the budgeting process including the master budget Learning objective. Analyze the differences between a static budget and a flexible budget. Calculate price and efficiency variances using standards. Assess the benefits of benchmarking. Examine the types of variances that are created when there are differences between budgets and/or standard costs and actual costs