Discuss the uses and advantages of the budget. Explain the concept of control and budgetary control.

Discuss the uses and advantages of the budget.
Explain the concept of control and budgetary control.

Expert Solution

a.

Advantages of Budget

1) Allocation of Resources : One of the most important advantage is budget helps you allocate money to various different operations of the organisation.

2) Guides the Management : By allocation of various funds available with the firm, the management is able to plan the activities

of the organisation.

3) Optimum Utilisation of Resources : Since the budget is pre-planned and requiers allocation, it is considered to optimize the utilisation of resources of the organisation.

4) Income & Expenditure : It helps to manage the income and expenditure of the organisation.

b.

Concept of Control :

Control refers to setting pre determined standards and measuring actual performance with the pre defined standards and taking corrective measures, if required. This is a continuous process as managers are required to control business activities regularly to achieve organisational goals.

Budgetry Control :

Budgetry control refers to process in which future budgets are made and they are measured with the actual budget performance. This helps in finding out deviation between actual performance and planned budget. It also involves taking corrective measure for future budgets.

If you have any doubt, ask me in the comment section please.

jeff jeffy answered 1 year ago

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