Question

Edit question Who are the key players in a Traditional or classical budget and what are their roles?

Answer 1

Traditional budgeting:-This is the method of preparation and budget in which last year's budget is taken as the base . It contains the current year's budget is preprpre by making changes to previous year's budget by adjusting the expenses based in the inflation rate ,market situation, consumer demand ,etc. The items need to be justified which are over and above the last year's budget in the traditional budget.

Role :-

1) stability:- The budget bring stability in the function of an organisation, as the financial activities are done with co -ordination and everyone knows what needs to be done. This is because it is old budget method.

2) Consolidation:-This helps in improving the performance of those projects which were underperforming before they were clubbed with a good performing working project.

3) Implementation :- It can be prepared Faster as not many changes are required in the previous yeasye budget .

4) Decentralisation:- This budget can be prepared separately by its headquarters on its own and can make changes within the allowed limits .

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