Chapter 4: Preparing budgets (adjusting budgets)

Question 1

Adjusting budgets

Answer 1

Not happy with the initial draft budget, for example not happy with current level of budgeted profits - could reduce selling price to sale more items hoping for increased sales revenue

Question 2

Changing budgetary assumptions

Answer 2

Budget drawn up based on assumptions

Turns out to be incorrect assumptions

Take the original budget figure back to the previous year by stripping out original assumption

Put in new assumptions

Question 3

Explaining budget

Answer 3

Has all the information been taken into account?

Has inflation been applied?

How has forecast demand been established?

example considerations