Week 7 - Budgetary Planning and Control

Question 1

What is budgeting?

Answer 1

Budget is:

1. a plan
2. expressed in monetary terms
3. covering a future time period
4. based on a defined level of activity

Question 2

Purpose of budgeting

Answer 2

• Implement strategy by allocating resources in line with strategic goals
• Co-ordinate activities and assist in communication between different parts of the organization
• Motivate managers to achieve targets
• Provide a means to control activities
• Evaluate managerial performance