32. Glossary Flashcards
Budgeting
Definition
planning future activities by establishing performance targets, especially financial ones.
Budget holder
Definition
the individual responsible for the initial setting and achievement of a budget.
Variance analysis
Definition
calculation of the differences between budgets and actual figures, and analysis of the reasons for such differences.
Delegated budgets
Definition
budgets for which junior managers have been given some authority for setting and achieving.
Incremental budgeting
Definition
uses last year’s budget as a basis, and an adjustment is made for the coming year.
Zero budgeting
Definition
sets budgets to zero each year and budget holders have to argue their case for target levels and to receive any finance.
Favourable variance
Definition
change from the budget that leads to higher than planned profit.
Flexible budgeting
Definition
cost budgets for each expense are allowed to vary if sales or output vary trom budgeted levels.
Adverse variance
Definition
change from the budget that leads to lower than planned protit.
