Finance, budgeting

Question 1

what is an income budget?

Answer 1

-expected income/sales
-can be broken down into specific products/ location of stores

Question 1

what is a budget?

Answer 1

a financial plan for the future concerning income, expenditure and profits of the business

Question 2

what is an expenditure budget?

Answer 2

includes fixed and expected variable costs

Question 3

what is a profit budget?

Answer 3

profits which are expected to be made

Question 4

what are the disadvantages of a budget?

Answer 4

• unexpected costs can alter the budgeting forecast, for example) inflation, competitor lowers prices so there Is a loss of customers
  -market constantly changes therefore it is hard to predict
• it is time consuming

Question 5

what are the advantages to creating a budget?

Answer 5

• motivate staff to reach a goal
• allow delegation of subordinates being set goals, without the loss of control by manager

Question 6

what stakeholders are impacted by a budget?

Answer 6

• employees
• manager
  -suppliers
  -customers