Value of Budgeting (AQA A-Level Business): Flashcards
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Value of budgeting
Value of budgeting
Weighing advantages vs disadvantages of budgets
Budget benefit: Setting targets
Budget benefit: Setting targets
Establish specific financial goals for departments
Budget benefit: Identify waste
Budget benefit: Identify waste
Spotlight unnecessary spending & wasteful practices
Budget benefit: Financial awareness
Budget benefit: Financial awareness
Managers consider financial consequences of decisions
Budget benefit: Financial control
Budget benefit: Financial control
Clear spending limits prevent overspending
Budget benefit: Delegated budgets
Budget benefit: Delegated budgets
Give managers autonomy, motivating through responsibility
Budget drawback: Inflexibility
Budget drawback: Inflexibility
Too rigid, hard to respond to changing circumstances
Budget drawback: Accuracy
Budget drawback: Accuracy
Wide variances demotivate staff & waste resources
Negative variance meaning
Negative variance meaning
Actual sales lower than budgeted
Positive variance meaning
Positive variance meaning
Actual costs lower than budgeted