Setting Budgets Flashcards
0
Q
Adverse Variance
A
The difference between the budgeted and actual figure which has a negative impact on profit
1
Q
Budget
A
A financial plan for the medium to long term. Budgets include income, production and expenses
2
Q
Favourable Variance
A
The difference between the budgeted and actual figure which has a positive impact on profit
3
Q
Limiting Factor
A
A constraint placed upon a business’ budgets, eg. capacity. It determines which budget is drawn up first
4
Q
Zero Budgeting
A
Where budgets are set at £0 and therefore managers have to fully justify spending levels in the future
