University of St. Marks and St. Johns
MBA 621 Financial and Managerial Accounting
Assignment 2: “Budgeting”
Students Name: Md. Bazlul Karim
Students ID: R1404D113105
Strategic Planning: 3
Differences among Long Range Planning, Strategic Planning and Budgeting 4
Is Budgeted performance better than past performance as a basis for judging actual results? 4
The benefits of budgeting: 4
Is budgeting an unnecessary burden for day to day problems? 4
Sales forecasting: 5
Spreadsheets as an aid in the application of sensitivity analysis: 5
Comments about budget: 6
1. Sales Budget: 7
2. Cash Budget: ...view middle of the document...
Some major role of management accounting involves while contributing to the company’s decisions about planning, strategy and control. These roles are scorekeeping, problem solving or attention directing. Scorekeeping means to accumulate data and reports results. Managers sometime want to have information’s that is available in the budget. Attention directing helps the managers’ to focus on their opportunities and problems. And problem solving is basically helps to make decision for any comparative analysis. Budget will provide information’s by scorekeeping (data). Managers can use his budget and performance reports for decision-making process and attention direction. This will help him determine the situation and make any decisions and solve any problems. (Stanberry, 2008)
Strategic Planning: Strategic planning is a process that defines an organizations strategy, or any direction or decisions used for the purpose of implementing that strategy. Strategy includes the processes of formulation and then implementation and strategic planning helps coordinate them at the same time. However, strategic planning is usually analytical in nature.
Long Range Planning: Long-range planning is a discipline that is used by the companies for determining the best possible strategy to be successful in the markets. This planning is served to ensure that the company has the capabilities that are needed in their strategic objectives. (Ross & Westerfield, 2014)
Differences among Long Range Planning, Strategic Planning and Budgeting: Long term planning, strategic planning and budgeting has some major differences. They are different in case of their process, purpose, information’s, time range and many other ways. But there are two main differences:
* To match the revenues against preplanned expenditures budgets are usually prepared but the strategic planning is prepared to project how long-term funding will be happened and mostly emphasized on focusing the financial resources.
* For taking care of organizations needs the budget is prepared but long term planning mainly plans on how resources will be allocated efficiently.
Is Budgeted performance better than past performance as a basis for judging actual results?
Budgeted performance is a better way to judge the past performance. This reason behind this is that there exists lack of efficiencies are included in the past. Budgeting will be helpful to eliminate these lacking.
The benefits of budgeting: there are some major benefits of a budget. These are:
* Gives the manager control over their money
* Makes the manager aware about the circulation of their money
* Helps the manager to spend and saving in an organized manner
* Provides the manager with an early warning for potential problems
* Helps the manager determine how much debt they can take.
* Enables the manager to have extra money by using different mechanism
( Randall, 2000)