Managing Accounting
Table of Contents
Introduction 2 I. The nature and purpose of the budgeting process to the company’s Director 3 1. Definition of budgeting process 3 2. Purposes of budget 3 3. Budgeting process’s steps 4 4. Types of budgets 6 II. Appropriate budgeting methods and its needs for The Enterprise Company 7 1. Zero-based budgeting method 7 2. Incremental budgeting method 8 3. Flexible budgeting method 10 4. Static (master) budget method 10 5. Suggesting comfortable budgeting method for The Enterprise Company 11 III. Relevant budgets for the year 2011 11 IV. The principle of quality and value and methods to reduce cost and potential improvement for The Enterprise Company 17 1. Principle of quality and value 17 2. Method to reduce costs and potential improvement for Enterprise Company 18 Conclusion 20 Appendix 21 Reference 28
Introduction
The Enterprise Company manufactures two kinds of product known as A and S. As a Management Accountant of the Enterprise Company, I will compile a report covering following issue: 1. The nature and purpose of the budgeting process to the company’s directors. 2. Select appropriate budgeting method and its needs for the Enterprise Company. 3. Prepare all the relevant budgets for the year 2011. 4. The principle of quality and value to the company’s Board of directors and methods to reduce costs and identify areas of potential improvement. *
The nature and purpose of the budgeting process to the company’s Director
Definition of budgeting process
According to Management Accounting book, a budget is defined as “a quantitative statement, for a defined period of time, which may include planned revenues, expenses, assets, liabilities and cash flow.” (BPP Professional Education, 2004). It means that is a financial document used to project future income and expenses. Based on the accounting of revenue and expenses, the budgeting process may be carried out by
Introduction 2 I. The nature and purpose of the budgeting process to the company’s Director 3 1. Definition of budgeting process 3 2. Purposes of budget 3 3. Budgeting process’s steps 4 4. Types of budgets 6 II. Appropriate budgeting methods and its needs for The Enterprise Company 7 1. Zero-based budgeting method 7 2. Incremental budgeting method 8 3. Flexible budgeting method 10 4. Static (master) budget method 10 5. Suggesting comfortable budgeting method for The Enterprise Company 11 III. Relevant budgets for the year 2011 11 IV. The principle of quality and value and methods to reduce cost and potential improvement for The Enterprise Company 17 1. Principle of quality and value 17 2. Method to reduce costs and potential improvement for Enterprise Company 18 Conclusion 20 Appendix 21 Reference 28
Introduction
The Enterprise Company manufactures two kinds of product known as A and S. As a Management Accountant of the Enterprise Company, I will compile a report covering following issue: 1. The nature and purpose of the budgeting process to the company’s directors. 2. Select appropriate budgeting method and its needs for the Enterprise Company. 3. Prepare all the relevant budgets for the year 2011. 4. The principle of quality and value to the company’s Board of directors and methods to reduce costs and identify areas of potential improvement. *
The nature and purpose of the budgeting process to the company’s Director
Definition of budgeting process
According to Management Accounting book, a budget is defined as “a quantitative statement, for a defined period of time, which may include planned revenues, expenses, assets, liabilities and cash flow.” (BPP Professional Education, 2004). It means that is a financial document used to project future income and expenses. Based on the accounting of revenue and expenses, the budgeting process may be carried out by