Zero base budgeting
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Zero-based budgeting requires all expenses to be justified for each new period, starting from zero rather than using the previous budget. It differs from traditional budgeting by being decision-oriented and focusing on cost-benefit analysis rather than just monitoring expenditures. The zero-based budgeting process involves setting objectives, identifying operational areas, developing decision packages, performing cost-benefit analyses, selecting packages, and finalizing the budget. It aims to efficiently allocate resources but can be time-consuming and force justification of all expenditure details.
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zero base budgeting
Zero-based budgeting is a method of budgeting where all expenses must be justified for each new period, starting from zero. It identifies the most efficient use of resources to achieve objectives. The marketing department budget for Company XYZ would be determined through zero-based budgeting by justifying each person and expense rather than simply increasing last year's budget. This approach identified that a construction equipment company could make certain parts in-house more cheaply than outsourcing, saving costs over traditional budgeting.
Zero base budgeting
Zero base budgeting is a managerial tool developed by Jimmy Carter in 1962 that begins the budgeting process from scratch each year without relying on previous year's budget. It focuses on evaluating the costs and benefits of individual programs, prioritizing activities, and allocating resources to activities based on their importance to organizational goals. The process involves listing objectives, deciding the scope, prioritizing activities, conducting cost-benefit analyses of decision packages, and selecting and approving the final budget. Zero base budgeting aims to optimize resource utilization and justify all expenditures, but it can be difficult and time-consuming to implement.
Zero Base Budgeting
Zero Based Budgeting (ZBB) requires justification of all expenses for each new budget period, regardless of past budgets. It involves identifying decision units, developing alternative decision packages for each unit, and ranking packages based on cost-benefit analysis. Key steps include defining minimum and incremental effort levels for activities, and prioritizing funding based on package rankings. ZBB aims to improve efficiency by re-evaluating all expenditures, but requires significant effort. Alternatives like priority budgeting and target-based budgeting are less intensive but still focus on value and priorities over incremental increases.
Zero based budgeting
Zero-based budgeting requires justifying all expenses for a new period based on actual needs rather than using previous budgets. It aims to optimize costs and value by requiring managers to justify expenses. The process involves identifying tasks, finding solutions, evaluating alternatives, setting priorities, and ensuring income minus expenses equals zero each month. While it increases accuracy and efficiency, it also requires significant time and resources. An example shows a company identifying internal manufacturing as more cost-effective than an outside supplier.
Budget, Budgeting & budgetary control
Presentation on Budget, budgeting and budgetary control..
Contents-
1) Budgeting [characteristics]
2) Budgetary control
3) Difference in budget, budgeting, budgetary control
4) Essentials in budgetary control
5) Requisites for budgetary control system
6) Merits & limitations
7) Zero-based budgeting
8) Difference in Traditional & Zero based budgeting.
Budgetary control
Budgetary control involves companies establishing budgets for revenue, expenses, assets and liabilities in advance of an accounting period. Managers prepare functional budgets for their departments, which are then combined into a master budget. Actual performance is continuously compared to budgets to ensure plans are achieved or provide a basis for revision. Budgetary control coordinates activities, provides responsibility accounting, motivates managers, and establishes a system for planning and control through regular budget reviews.
Performance Based Budgeting
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This document provides information on cost accounting, cost-effectiveness analysis, and auditing in nursing. It defines cost accounting as collecting, recording, and analyzing costs to help management with decision making. Cost-effectiveness analysis compares the costs and outcomes of different programs or interventions. The key steps in a cost-effectiveness analysis are identifying alternatives, determining costs and outcomes, and comparing cost-outcome ratios. Auditing ensures adequate cost accounting information for nurses to perform administrative and managerial roles effectively.
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zero base budgeting
Zero-based budgeting is a method of budgeting where all expenses must be justified for each new period, starting from zero. It identifies the most efficient use of resources to achieve objectives. The marketing department budget for Company XYZ would be determined through zero-based budgeting by justifying each person and expense rather than simply increasing last year's budget. This approach identified that a construction equipment company could make certain parts in-house more cheaply than outsourcing, saving costs over traditional budgeting.
Zero base budgeting
Zero base budgeting is a managerial tool developed by Jimmy Carter in 1962 that begins the budgeting process from scratch each year without relying on previous year's budget. It focuses on evaluating the costs and benefits of individual programs, prioritizing activities, and allocating resources to activities based on their importance to organizational goals. The process involves listing objectives, deciding the scope, prioritizing activities, conducting cost-benefit analyses of decision packages, and selecting and approving the final budget. Zero base budgeting aims to optimize resource utilization and justify all expenditures, but it can be difficult and time-consuming to implement.
Zero Base Budgeting
Zero Based Budgeting (ZBB) requires justification of all expenses for each new budget period, regardless of past budgets. It involves identifying decision units, developing alternative decision packages for each unit, and ranking packages based on cost-benefit analysis. Key steps include defining minimum and incremental effort levels for activities, and prioritizing funding based on package rankings. ZBB aims to improve efficiency by re-evaluating all expenditures, but requires significant effort. Alternatives like priority budgeting and target-based budgeting are less intensive but still focus on value and priorities over incremental increases.
Zero based budgeting
Zero-based budgeting requires justifying all expenses for a new period based on actual needs rather than using previous budgets. It aims to optimize costs and value by requiring managers to justify expenses. The process involves identifying tasks, finding solutions, evaluating alternatives, setting priorities, and ensuring income minus expenses equals zero each month. While it increases accuracy and efficiency, it also requires significant time and resources. An example shows a company identifying internal manufacturing as more cost-effective than an outside supplier.
Budget, Budgeting & budgetary control
Presentation on Budget, budgeting and budgetary control..
Contents-
1) Budgeting [characteristics]
2) Budgetary control
3) Difference in budget, budgeting, budgetary control
4) Essentials in budgetary control
5) Requisites for budgetary control system
6) Merits & limitations
7) Zero-based budgeting
8) Difference in Traditional & Zero based budgeting.
Budgetary control
Budgetary control involves companies establishing budgets for revenue, expenses, assets and liabilities in advance of an accounting period. Managers prepare functional budgets for their departments, which are then combined into a master budget. Actual performance is continuously compared to budgets to ensure plans are achieved or provide a basis for revision. Budgetary control coordinates activities, provides responsibility accounting, motivates managers, and establishes a system for planning and control through regular budget reviews.
Performance Based Budgeting
The document summarizes performance budgeting approaches used by several US states and municipalities. It discusses how states like Arizona, Maryland, Texas, Virginia, and Washington incorporate performance measures and information into their budget processes. It also provides examples of performance budgeting efforts in the cities of Long Beach, California and Maricopa County, Arizona, describing the key components of their managing for results initiatives.
Cost accounting
This document provides information on cost accounting, cost-effectiveness analysis, and auditing in nursing. It defines cost accounting as collecting, recording, and analyzing costs to help management with decision making. Cost-effectiveness analysis compares the costs and outcomes of different programs or interventions. The key steps in a cost-effectiveness analysis are identifying alternatives, determining costs and outcomes, and comparing cost-outcome ratios. Auditing ensures adequate cost accounting information for nurses to perform administrative and managerial roles effectively.
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This document discusses responsibility accounting. It defines responsibility accounting as a system that collects planned and actual accounting information for responsibility centers. Responsibility centers are organizational units for which a manager is responsible for costs, revenues, or investment funds. There are four main types of responsibility centers: cost centers, revenue centers, profit centers, and investment centers. Responsibility accounting improves decision making, speed, and motivation by assigning accountability to managers of responsibility centers.
Zero Based Budgeting
Zero-base budgeting requires justifying all expenditures and programs from scratch each year without relying on previous funding levels. It involves identifying decision units, developing decision packages that outline alternative funding levels, and then ranking packages to determine priorities. While it promotes efficiency and flexibility, zero-base budgeting also increases paperwork and costs due to preparing numerous decision packages and ranking them subjectively.
Zero Base Budgeting
Zero-base budgeting requires managers to justify their entire budgets from scratch each year rather than relying on previous year's funding levels. It involves identifying decision units within an organization, creating decision packages that outline alternative funding levels and their expected impacts, and then ranking the decision packages in order of priority. While ZBB provides more transparency and accountability around funding decisions, it also requires significant effort and resources to implement effectively.
Budgetry control
A budget is a plan for projected income and expenses over a defined period. Budgeting involves formulating budgets, while budgetary control uses budgets to plan and control all aspects of production. Key elements of budgetary control include preparing budgets for each department, conducting ongoing comparisons of actual vs. budgeted performance, and taking corrective actions on variances. Budgets can be classified by time period (long-term vs. short-term), function (sales, production, etc.), or flexibility (fixed vs. flexible). Zero-based budgeting requires justifying all expenses for each new period without relying on previous budgets.
Cost Benefit Analysis(CBA)
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Cost Benefit analysis
Cost-benefit analysis (CBA) is a systematic process introduced in the 1930s by French engineer Jules Dupit to calculate and compare the monetary costs and benefits of a project or policy. It involves defining the project, identifying and assigning monetary values to all expected costs and benefits, comparing the costs and benefits, and using this analysis to determine the best course of action. The objectives of CBA include determining sound investment decisions, evaluating new projects or initiatives, understanding the strengths and weaknesses of different options, and choosing the most profitable alternative.
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- Budgets quantify plans to achieve objectives and compare actual vs planned outcomes.
- Functional budgets include sales, production, purchases, and labor budgets.
- The master budget summarizes all functional budgets in income statements, balance sheets, and cash flow statements.
Zero base budgeting
Zero base budgeting (ZBB) is an alternative budgeting method where all activities and expenses are reevaluated each year, starting from a "zero base". The document provides an introduction to ZBB, including its history, definition, purpose, application process involving decision packages, main features, advantages like more effective resource allocation, and disadvantages like increased paperwork.
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Zero base budgeting is a managerial tool developed in 1962 by Jimmy Carter that considers each year as a new year for budget preparation without reference to previous years. It focuses on forecasting future activities and cost-benefit analysis of decision packages to prioritize allocation of resources according to organizational objectives. Some key benefits include more accurate resource allocation based on priority, enhanced managerial capability, and optimum utilization of resources. The application of zero base budgeting involves identifying decision units, developing decision packages around objectives, and reviewing/ranking packages.
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The document discusses the concept of cost-benefit analysis (CBA) for evaluating information systems projects. CBA measures and compares the costs and benefits of a project to determine if its benefits outweigh its costs. The CBA process involves identifying the tangible and intangible costs and benefits of a project, evaluating them, and choosing the system with the lowest costs but highest benefits. CBA is useful for decision making by individuals, companies, and governments.
Marginal cost
Marginal costing is a technique that treats only variable manufacturing costs as product costs, while regarding fixed manufacturing overheads as period costs. It is helpful for managerial decision making and control by classifying costs as fixed or variable and determining profitability through contribution and cost-volume-profit analysis. Some key advantages include simplicity, meaningful reporting, ignoring the effect of fixed costs, and profit planning and cost control. Limitations include difficulties classifying some costs and not being suitable for external reporting or long-term decision making. Marginal costing differs from absorption costing in its treatment of fixed costs, stock valuation, impact on profits when sales vary, and emphasis on short-term decisions making and pricing.
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Zero Based Budgeting
Zero-base budgeting requires justifying all expenditures and programs from scratch each year without relying on previous funding levels. It involves identifying decision units, developing decision packages that outline alternative funding levels, and then ranking packages to determine priorities. While it promotes efficiency and flexibility, zero-base budgeting also increases paperwork and costs due to preparing numerous decision packages and ranking them subjectively.
Zero Base Budgeting
Zero-base budgeting requires managers to justify their entire budgets from scratch each year rather than relying on previous year's funding levels. It involves identifying decision units within an organization, creating decision packages that outline alternative funding levels and their expected impacts, and then ranking the decision packages in order of priority. While ZBB provides more transparency and accountability around funding decisions, it also requires significant effort and resources to implement effectively.
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A budget is a plan for projected income and expenses over a defined period. Budgeting involves formulating budgets, while budgetary control uses budgets to plan and control all aspects of production. Key elements of budgetary control include preparing budgets for each department, conducting ongoing comparisons of actual vs. budgeted performance, and taking corrective actions on variances. Budgets can be classified by time period (long-term vs. short-term), function (sales, production, etc.), or flexibility (fixed vs. flexible). Zero-based budgeting requires justifying all expenses for each new period without relying on previous budgets.
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Cost-benefit analysis is a quantitative tool used to evaluate the costs and benefits of projects, programs, and policies. It was developed by French economist Jules Dupuit and helps decision-makers efficiently allocate resources by identifying, quantifying, and converting costs and benefits into comparable values. The analysis provides a logical framework to analyze data and determine if the benefits of a project outweigh its costs. It is useful for capital expenditures, policy options, asset management, and post-evaluation of initiatives.
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Cost-benefit analysis (CBA) is a systematic process introduced in the 1930s by French engineer Jules Dupit to calculate and compare the monetary costs and benefits of a project or policy. It involves defining the project, identifying and assigning monetary values to all expected costs and benefits, comparing the costs and benefits, and using this analysis to determine the best course of action. The objectives of CBA include determining sound investment decisions, evaluating new projects or initiatives, understanding the strengths and weaknesses of different options, and choosing the most profitable alternative.
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Zero based and performance based budgeting
Performance-based budgeting aims to improve the effectiveness and efficiency of public expenditure by linking funding to results. It uses performance information like indicators, evaluations, and program costings to make this link. The impact may be felt through improved prioritization of spending and better service effectiveness or efficiency. Some key aspects include defining measurable objectives and impacts for programs, developing alternatives to achieve objectives, and evaluating programs based on cost-benefit analysis to determine priority for funding. While it promotes efficient resource allocation, limitations include increased paperwork and subjective ranking of programs.
Budgeting
The document discusses budgets, including:
- Budgets quantify plans to achieve objectives and compare actual vs planned outcomes.
- Functional budgets include sales, production, purchases, and labor budgets.
- The master budget summarizes all functional budgets in income statements, balance sheets, and cash flow statements.
Zero base budgeting
Zero base budgeting (ZBB) is an alternative budgeting method where all activities and expenses are reevaluated each year, starting from a "zero base". The document provides an introduction to ZBB, including its history, definition, purpose, application process involving decision packages, main features, advantages like more effective resource allocation, and disadvantages like increased paperwork.
Zero budgeting
Zero base budgeting is a managerial tool developed in 1962 by Jimmy Carter that considers each year as a new year for budget preparation without reference to previous years. It focuses on forecasting future activities and cost-benefit analysis of decision packages to prioritize allocation of resources according to organizational objectives. Some key benefits include more accurate resource allocation based on priority, enhanced managerial capability, and optimum utilization of resources. The application of zero base budgeting involves identifying decision units, developing decision packages around objectives, and reviewing/ranking packages.
Marginal Costing
The document discusses marginal costing and its advantages for managerial decision making. Marginal costing involves separating variable and fixed costs. It allows companies to determine contribution margins, break-even points, and margins of safety to aid in decisions around pricing, production levels, and profitability. The key advantage is it focuses on the impact of changes in output on profits. Some disadvantages are it understates inventory values and fixed costs are excluded from short-term decision making.
Capital budgeting
,
capital budgeting
,
concept of capital budgeting
,
the capital budgeting process
,
significance of capital budgeting
,
classification of investment project proposals
,
techniques of capital budgeting
,
types of project
BUDGETING TECHNIQUES
The three main budgeting techniques and their advantages and disadvantages.
(Zero-based budgeting is not elaborated)
Classification of budget
This document discusses different types of budgets used in business. Budgets can be classified in several ways: by time (long-term vs short-term), by capacity (fixed vs flexible), and by scope (functional vs master). Functional budgets include sales, production, materials, purchase, and cash budgets. A master budget integrates all functional budgets to estimate profit/loss and financial position. Budgets can also be classified by receipts and expenditures as capital budgets or revenue budgets. In conclusion, budgets are prepared maps that aim to optimize resource utilization according to organizational policies and functions.
Classification of cost
Elements of Cost: Classification of Cost:element wise classification :function wise classification :behavior wise classification: Managerial decision making classification
control techniques
This presentation discusses traditional and modern control techniques that managers can use to effectively monitor organizational activities. Some traditional techniques mentioned include personal observation, budgeting, break-even analysis, financial statements, and standard costing. Modern techniques discussed are return on investment, management audits, management information systems, and PERT/CPM. The presentation provides details on how each technique works and its benefits for control purposes.
Types Of Budgets
The document discusses budgets and budgetary control. It defines a budget as a written plan of action prepared in advance based on objectives to be attained, expressed in monetary and/or physical units. Budgets are prepared for the implementation of management policy and may provide sales targets or production targets. Budgets are used as a means of control by comparing actual results to the budget and taking corrective action for deviations. Budgetary control refers to using budgets to control a firm's activities.
Cost-Benefit Analysis
The document discusses the concept of cost-benefit analysis (CBA) for evaluating information systems projects. CBA measures and compares the costs and benefits of a project to determine if its benefits outweigh its costs. The CBA process involves identifying the tangible and intangible costs and benefits of a project, evaluating them, and choosing the system with the lowest costs but highest benefits. CBA is useful for decision making by individuals, companies, and governments.
Marginal cost
Marginal costing is a technique that treats only variable manufacturing costs as product costs, while regarding fixed manufacturing overheads as period costs. It is helpful for managerial decision making and control by classifying costs as fixed or variable and determining profitability through contribution and cost-volume-profit analysis. Some key advantages include simplicity, meaningful reporting, ignoring the effect of fixed costs, and profit planning and cost control. Limitations include difficulties classifying some costs and not being suitable for external reporting or long-term decision making. Marginal costing differs from absorption costing in its treatment of fixed costs, stock valuation, impact on profits when sales vary, and emphasis on short-term decisions making and pricing.
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Zero-base budgeting is a budgeting technique used by governments and corporations to allocate resources more efficiently. It requires examining all programs, including current ones, to see if funds would be better spent elsewhere. The process involves developing "decision packages" for all programs that justify costs and benefits. These packages are then ranked to prioritize programs. A modified approach is service-level budgeting, which starts with a higher base, like 80-85% of current spending, to identify priorities and potential reductions to fund new programs.
Zero base
Zero-base budgeting is a budgeting technique used by governments and corporations to allocate resources more efficiently. It requires examining all programs, including current ones, to see if funds would be better spent elsewhere. The process involves developing "decision packages" for all programs that justify costs and benefits. These packages are then ranked to prioritize programs. The goal is to redirect spending from lower to higher priority programs to improve effectiveness and reduce costs. A modified approach is service-level budgeting, which sets spending at 80-85% of current levels and considers new programs for the remaining funds.
Budgeting in nursing
Budgeting involves creating financial plans for an organization over a set period of time, usually a year. The budgeting process begins with setting goals and strategies and involves estimating revenues and expenses. Key steps include assessing objectives, programs, costs, and alternatives to determine the most effective fiscal plan. Budgets have advantages like planning, accountability, and performance measurement, but also disadvantages like becoming too rigid or time-consuming.
Wahid’s view the cogent task and the confront of financialeconomic analysis ...
Wahid’s view the cogent task and the confront of financialeconomic analysis ...Mohammad Wahid Abdullah Khan
This document discusses Wahid's view on using financial and economic analysis to support modern business decision making. It explains that financial analysis can help managers increase corporate and shareholder value through strategies like mergers and acquisitions. The document also discusses how financial analysis should be conducted effectively by regularly monitoring progress, applying standards, and identifying areas for improvement. It emphasizes that financial analysis is important for operational planning, strategy planning, performance reviews, and management decision making.Budgetary & Control
This document provides an overview of budgetary planning and control systems. It discusses the objectives of such systems which include ensuring communication, coordination, control and motivating employees. Various budgeting techniques are described such as top-down vs bottom-up budgeting, incremental budgeting, fixed vs flexible budgets, zero-based budgeting and activity-based budgeting. Feedback and feedforward control are also explained.
DOC-20230225-WA0005..pdf
Budgetary control involves preparing budgets for future periods, comparing actual performance to standards set in the budgets, analyzing differences, and taking corrective actions. Key steps in the budgetary control process are to prepare budgets, compare actuals to budgets, and take corrective actions. Variance analysis compares actual accounting figures to estimated figures for each department to find favorable and unfavorable variances. Responsibility accounting creates cost, profit, and investment centers to assign accountability for goals. Adjustment of funds allows management to move surplus funds from one project to another as needed. Zero-based budgeting sets the next year's budget at zero so estimated revenue must equal estimated expenses.
Essentials Of Planing
This document discusses the meaning and process of planning. It defines planning as selecting objectives and deciding on actions to achieve them through decision making. The key steps in planning are: 1) being aware of opportunities, 2) establishing objectives, 3) developing premises, 4) determining alternative courses of action, 5) evaluating alternatives, 6) selecting a course, 7) formulating derivative plans, and 8) quantifying plans through budgeting. Planning involves setting goals at different levels, from overall mission to operational plans, and is necessary for organizations to effectively organize resources to achieve objectives.
Budget, Budgeting & budgetary control
Presentation on Budget, Budgeting & Budgetary control
Contents:
1) Budgeting [characteristics]
2) Budgetary control
3) Difference in budget, budgeting, budgetary control
4) Essentials in budgetary control
5) Requisites for budgetary control system
6) Merits & limitations
7) Zero-based budgeting
8) Difference in Traditional & Zero based budgeting.
Budget and budgetary control
This document provides an overview of budgets and budgetary control. It defines a budget as a quantified financial plan for a defined future period. Budgets have benefits like helping control spending, focus on goals, and organize finances. The key types of budgets discussed include sales, production, costs, materials, purchases, labor, overhead, selling & distribution, administration, capital expenditures, and cash budgets. Budgetary control involves establishing budgets, comparing actuals to budgets, and taking corrective action for variances. The objectives of budgetary control are planning, coordination, communication, motivation, control, and performance evaluation.
Budget and Budgetary control
Topic :- Budget and Budgetary control
From Financial Analysis And Control
belongs to M.Com 1st syllabus
ACTIVITY BASED BUDGETING & BUDGETING CYCLE
The budgeting cycle has four main phases: preparation, approval, execution, and evaluation. In the preparation phase, a budget is created by estimating expenses. The approval phase involves getting sign-off on the budget from stakeholders. During the execution phase, the approved budget is implemented by tracking spending. In the evaluation phase, the budget is reviewed and assessed to see if targets were met and inform the next budget cycle. Activity-based budgeting takes a more rigorous approach than traditional budgeting by analyzing the activities that drive costs and allocating resources based on activity levels.
sai krishna
This document provides an introduction and overview of budgets and budgetary control. It defines what a budget is, the different types of budgets (capital vs operating budgets), and the objectives and benefits of budgets, such as planning, coordination, motivation, communication, and control. It also defines budgetary control and its key aspects, like establishing budgets for functions/sections, comparing actual to budgeted performance, and taking corrective actions. The document outlines the budgeting process, including organizing the budget team, developing the capital and revenue budgets, approving the budgets, and monitoring performance against the budgets. It discusses some limitations of budgetary control as well.
Budgeting concepts
This document discusses budgeting concepts including its characteristics, objectives, techniques/process, principles, advantages, and limitations. Budgeting is a technique used for future forecasting and planning based on business objectives. It helps improve managerial efficiency, cost control, and performance evaluation. The budgeting process involves formulating policies, drafting forecasts for areas like sales and costs, coordinating departmental budgets, and approving a master budget. Budgeting principles include sponsorship by top management, determining responsibility centers, and taking timely corrective action. Advantages are helping with planning, decision making, and resource utilization. Limitations include potential for bias and increased costs.
The unwritten rules_of_budgeting
The document discusses the unwritten rules of budgeting that commonly guide organizational behavior, such as inflating costs and suppressing revenues in initial budgets. It argues these rules undermine effective budgeting and strategy execution. The document then outlines approaches to overcoming these rules by focusing budgets on strategic outcomes, using collaborative budget processes, and rewarding employees based on strategic goals rather than just budget attainment. It similarly discusses common unwritten rules around budgeting systems, and how new budgeting technologies are helping to rewrite these rules by facilitating driver-based planning, initiative-based budgets, and continuous strategic planning.
Managerial Accounting Final Paper
This document discusses profit planning and budgeting. It covers several key topics in 3 paragraphs or less:
1) An introduction defines profit planning and budgeting, noting that budgets allow companies to forecast costs and determine strategies. Budgets are used at all levels from personal to corporate.
2) Advantages of budgets are that they allow companies to plan goals for departments and make corrections. Budgeting ensures all departments work toward the same goals. Top-down, bottom-up, and parallel budgeting approaches are discussed.
3) Responsibility accounting and how budgets are used in hospitals to allocate spending to departments is described. Managers are responsible for budgets they control, and must identify variances from budgets.
zero based budgeting & kaizen budgeting
Zero-based budgeting is a budgeting process where all expenses must be justified for the new period starting from zero rather than using the previous budget as a baseline. It was developed in the 1960s by Jimmy Carter and requires evaluating all budget items and activities from scratch each period to determine what should be funded. While it provides benefits like improving cost-effectiveness and strategic alignment, it is also very time-intensive and complex compared to traditional incremental budgeting.
Planning
This document discusses various aspects of planning including definitions, purposes, and types of plans. It defines planning as a process of setting objectives by analyzing information to select courses of action to achieve goals. It notes that planning is the primary function of management, is goal-oriented, intellectual, pervasive, continuous, integrates activities, and effects efficiency. The document also discusses types of plans including objectives, policies, procedures, methods, rules, programs, projects, and budgets.
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Budget control and budget making techniques in a hospital
Budget control and budget making techniques in a hospital
Wahid’s view the cogent task and the confront of financialeconomic analysis ...
Wahid’s view the cogent task and the confront of financialeconomic analysis ...
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Problems and Prospects of Border Trade between North east India and Bangladesh
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Problems and Prospects of Border Trade between North east India and Bangladesh
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Zero base budgeting
- 2. What is zero-based budgeting? Difference between traditional budgeting and zero-base budgeting. Process involved in zero-base budgeting. Advantages and disadvantages .
- 3. A method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a "zero base" and every function within an organization is analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one.
- 4. TRADITIONAL It is more accounting oriented. Its approach is monitoring towards expenditure. ZERO-BASE It is decision oriented. Its approach is towards achievement of objectives.
- 5. Its focus is on increase or decrease of expenditure over the past. In traditional budgeting, communication is very vertical. It focus is on cost benefit analysis. It encourages communication both vertical and horizontally.
- 6. The objective of budgeting should be determined. When the objective is clear, then efforts will be made to achieve that objective. Next is to decide which operational areas should be used or applied. The next step in zero based budgeting is developing of ‘decision packages’.
- 7. Cost and benefit analysis should be undertaken. The final step involved in zero-based budgeting is concerned with selected, approving decision packages and finalizing the budget
- 8. Efficient allocation of resources, as it is based on needs and benefits. Drives managers to find cost effective ways to improve operations. Increases staff motivation by providing greater initiative and responsibility in decision-making. Increases communication and coordination within the organization.
- 9. Difficult to define decision units and decision packages, as it is time-consuming and exhaustive. Forced to justify every detail related to expenditure. The R&D department is threatened whereas the production department benefits. Honesty of the managers must be reliable and uniform.
- 10. Therefore, it is concluded that zero based budgeting is a revolutionary concept and is relatively a new management tool for planning and control of activities. It involves people at all levels in the organization and promotes team spirit.
Editor's Notes
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