2.2.4 Budgets Flashcards by Kaba Al-Shamim | Brainscape

Q

What are some purposes of budgets

A

To motivate staff within a department
To ensure no department spends more than the company expects
To enable spending power to local delegated managers

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Q

Give the definition of a budget

A

A financial plan concerning the business’s costs and revenue in the future.

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Q

What are some causes of higher favourable variances

A

Stronger demand than anticipated
Better than expected efficiency of productivity
Selling prices increased higher than budgets

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Q

Explain what a historical budget is

A

Setting budget for upcoming year based on what happened in the previous year

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