The questions tailored in the questionnaire were structured in closed-ended and open-ended. The ultimate effect of budgeting is the thorough examination and scrutinizing the financial aspect of the business enterprise. Budgetary control is the analysis of what happened when those programs came to be put into pattern, and what the administration did or did non make to rectify for any fluctuations from these programs. The Indian sugar industry second large agro industry Located in the rural India. If the budgets are revised frequently, the employees can lose their faith in budgeting. Limitations of Budgetary Control: 1. The new act modifies these requirements and codifies structures established to implement the 1993 act in an effort to strengthen the use of performance information for budgeting and managing.
Absorption costing is also called 'traditional costing'; it is more simplistic and uses arbitrary allocation. And budgeting also aid management in planning, coordinating and controlling operation. By this statement or submitted report, they will take correct decision about the organizational activities. The lower level of management did not agree that budget serve as an effective means of communication. The more complex the administration and the more complex the procedures within that administration, the greater the figure and assortment of interrelatednesss that any budget for that administration is bound to incorporate. Direct labor budget: The labor budget estimates the labor, adequate in number and grades, to enable theproduction budget to be achieved. The reason is that every manager wants to get more resource allocation through budgets, shirk responsibility and blames others for pit falls.
It secures better co-ordination among various departments. It is the duty of the Budget Officer to see that the periodical budget reports are supplied to the recipients at frequent intervals as far as possible. Budgeting act as a toll of both planning and control. They maintain two types of books of accountsBabasabpatilfreepptmba. Budget centres Different organizations are tend to be divided in various organizational departments to ensure the maximum benefit of the budget and the budgetary control. In case, the level of activity attained is different from the level of activity for budgeting purposes, the fixed budget becomes ineffective. Budgeting is, therefore, not a follow proof tool.
This could report on performance against predetermined objectives and the budget approved at the start of financial year. This is done against total contribution. Good working environment would increase morale among workers and enhance good communication. Periodic reports from various sections of a department will be received by the departmental head that will submit a summary report about his department to the budget committee. The deviations are find out by comparing actual performance with budgeted figures.
Break-Even Analysis: The break-even analysis is basically concerned with the cost-volume-profit relationships in the organization. Budget may be prepared for the business as a whole, for departments, for functions such as sales and production or for financial and resource items such as cash, capital expenditure manpower purchase etc. This is so because managers want to know more than they have done currently in relation to last period performance, they also want to know how they have done currently in relation to their current target performance. Some of these limitations include:- People in an organization see budgets and the standard they set as militating against the contingent use of initiative. Introduction Budgeting has come to be accepted as an efficient method of short-term planning and control. Other objectives of the organization may include: The profitability of the organization The welfare of management and employees. They provide the estimates of expenditures and revenues in the organisation.
The resources of the company are given the fullest and most economic use. The state share of the federation account has been on the decline for some time now and this compled with the ever-increasing government responsibilities of catering for its citizening. From this evidence, it is obvious that budgets and budgetary control carry with them many benefits. Co-Ordination: The common objectives of the firm may be successfully achieved by the way of budgetarycontrol because it stimulates the co-operation of all concerns with the co-ordinates the variousactivities. Essentially the production budget is thesales budget adjusted for inventory changes as follows. Budgetary Control Techniques Public finance in Nigeria by Ugwu Monday J. Some of these advantages include:- a By formalizing the responsibilities of planning budgeting compels managers to think ahead anticipate and prepare for changing conditions in their organization.
Nothing will be allowed simply because it was being done in the past. The best way to prepare for changing conditions is to provide a frame work that contains a specific, but sufficiently flexible plan to accommodate unanticipated changes. The cost of installing and operating a budgetary control system should be commensurate with the benefits derived there from. Determining the actual costs to make a comparative study in the organisation. The above analysis shows that zero base budgeting is in a way an extension of the method of cost benefit analysis to the area of the corporate budgeting.
Detailed Organization Structure: There should be a detailed organization structure with precisely designed authorities, responsibilities and lines of communication so that everybody in the organisation understands the significance of objectives in detail. Frequent Comparison: There should be frequent comparison between budget estimates and operating results in the organisation. If the Directors approve theapplication, then only he is treated as shareholder of the factory. Controls encompasses all the methods and procedure which direct employee towards achieving the organizational objective. To review the system of budgeting operating in an organization.