3. Time nature
Long term-
5-10 years,
Top level management,
Used by those industries where gestation(dev. period) period
is long,
Mostly done in R&D, long term finances etc.
Short term-
1-2 yrs,
Monetary nature
Industries like Cotton, Textiles uses the short term budgets
Current Budget
Months & weeks,
Current activities,
4. On the basis of Functions-
Operating
Sales Budget
Production Budget
Production Cost Budget
Purchase Budget
Raw material Budget
Labor Budget
Plant Utilization Budget
Manufacturing/Works Overhead Budget,
Administrative & Selling Expenses Budget
Program Budget
Responsibility Budget
5. Contd..
Program Budget-
Expected revenues
Product/project are considered as major program,
Locate where to reduce the cost & increase revenues,
Determine the imbalances & inadequacies
Corrective action can be taken
Responsibility
Construct the responsibility areas like Cost/Expenses centre,
Profit centre, Investment Centre,
Plans in terms of person,
Control device
6. Functions - Financial
Cash Budget
Working Capital
Capital Expenditure
Income Statement
Statement of Retained Earning Budget,
Budgeted Balance Sheet or Position statement
Budget.
7. Function-Master
Various functional budget are integrated
Summary budget incorporating its functional
budget,
Prepared by budget officer,
Used to coordinate among the various functional
department.
Control device
8. Flexibility
Fixed
Units are overlooked
Given level of activity
Before the beginning of FY
Anticipated changes are not adjusted,
Suitable under static condition,
Useful when sales, expenses & costs can be forecasted with
great accuracy.
Flexible
Consists of series of budgets
Varies with the level of activity attained.
Prepared after considering the unforeseen changes,
Difference between fixed, semi-fixed & variable cost.
