Chapter 5.8: Budgetary Control

Question 1

True or false: budgetary control is the result of managing budgets and product life cycles, and putting together a well-planned budget to make smart financial decision at an organization.

Answer 1

True.

Question 2

What is the relationship between budgetary control and forecasts?

Answer 2

Budgetary control relies on accurate forecasts to assess variances between budgeted and actual performance.

Question 3

What is the relationship between budgetary control and product life cycles?

Answer 3

Budgets need to adapt to the product’s life cycle, e.g a product’s changes over time, as each change has specific needs and financial impacts on an organization.

Question 4

What is the relationship between forecasting and planning in product life cycles?

Answer 4

Forecasts help predict demand and sales, which organisation’s can use to plan costs, prices and resource allocation, as well as predicting demand for a product.

Question 5

What is the relationship between product life cycles and budgets?

Answer 5

Budgets allocate financial resources and adjust accordingly to each stage of a products life cycle.