Organizations financial budgeting
Reply 1
Activity-based costing offers an accurate method of service or product servicing leading to accurate pricing choices. ABC as well increases cost drivers and overheads and makes non-valuable activities visible, creating the managers to eliminate them. Therefore, managers will be in a position to use funds on necessary things that bring profits to the company. Also, it improves customer and product profitability analysis. It’s a methodology for assigning overhead expenses by assigning them to actions. Once assigning of costs is done to operations, the expense can be allocated to the cost matters that apply such activities. The system can be used to reduce the expenses, which are surplus and events, which cant be given the priority. The accounting tools work best in a complex environment. This is a situation where many products and processes are involved. Its a good strategy but the problem cant be used in areas where the environment not busy.
Reply 2
When talking about master budgeting, it entails all lower-level budgets made in the organization’s various financial regions. It’s present in almost the whole of the year. It’s an essential tool that management applies to the direct actions of the firm. The tools, as well as judge the productivity of many responsibility centers. The management of the company manages its operations since the tool will enable them to know the correct path to take. Furthermore, the administration can know about judgments based on performance. If the judgment shows that performance is not good, then the organization can plan on the means to adjust its activities. Through budgeting events, the company will have a prevailing direction. The tool comprises of all low-level budgets in different places and situations. Such kinds of budget are part of what controls the organization activities and give common focus and enable modification in different areas.
Reply 3
Organizations apply financial budgeting to promote planning as well as control within a business organization to enable them to manage business financial aspects and budget for expansion of the product further in the future. Budgeting also helps performance evaluation of organizations in their planning method. Before the beginning of the financial budgeting, the organization should create a plan and series of goals based on the plan. A master budget is a plan document for the company comprising all other budgets. It’s an annual budget and concurs with the fiscal year. If the plans for the organization are to be a continuous document, then a month is incorporated at the of the budget for perfect planning. It’s a process and might take time, but once its done, thing becomes smooth. No business can work and be effective without a proper budget. Such a budget which might be made temporary is incorporated in master budgeting.
Master budgeting articles
Kraan, D.-J. (2017). Enhancing the finance function in line ministries. OECD Journal on Budgeting, 75-92.
Budget, when applied in every sector, helps in doing things in the correct order. The paper discusses finance function primarily in the past and previously. The author focuses on the importance of budgeting when offered in the finance sector. There are various sectors which should be applied to make finance better, and budgeting is among the factors necessary for improvement
Samuels, J., & Sawers, K. (2017). SRS Educational Supply Company: An Instructional Budget Project. Issues in Accounting Education, 51-59.
Students as well as apply budget in different places the article explains the development of the master budget for merchandise. The authors offered two sections of grasping master budget mechanics and show how people develop budgets and adhere to the budgets effectively. The second section was the creation of a new budget in the different organizational structures. Both project methods applied helped to expose students to issues related to private/public information, cooperation, or communication. The authors as well presented modifications that highlight the process.
ABC articles
Allain, E., & Laurin, C. (2018). Explaining the implementation difficulties associated with activity-based costing through system uses. Journal of Applied Accounting Research, 181-198.
The purpose of the paper presented explored how and use of an activity-based costing system could encounter issues in establishing like cost system. The research was done conducted through the case study method of data collection. Based on the findings, a cost system purposed being simultaneously applied in enabling and controlling in generating difficulties. The authors explained that managers must be aware of implementing and designing a cost system that helps in stressful situations.
Hoozée, S., & Hansen, S. (2018). A Comparison of Activity-Based Costing and Time-Driven Activity-Based Costing. Journal of Management Accounting Research, 143-167.
In this article, the authors explained distinctions between ABC and TDABC. The reason beyond this was to mark difference and importance on both of the above. In this article, the main focus is on ABC. The study was carried through numerical and analytical experiments. Based on the results, both of them are similar qualitatively, but they are different quantitatively. ABC accurate when activities are traceable to products despite the resource traceability level. Therefore ABC is more bost system compared to the TDABC.
Lesson from the articles
For any business to operate effectively, budget is one of the factors which contributes to success. The financial budget makes the company have the necessary information on how the funds will be spent on different events of the company. Therefore, through ABC, it will be east to assign s cost of every action to all the goods and services based on the importance of the activity.
Application by the manager
With both of the concepts, managers get to understand how to operate and handle company operations. With the use of master budgeting, the idea offers necessary strategies that help the manager to know how to budget activities that require attention. ABC as well helps the manager to handle operations concerning the priority.