Ch 12: Budgetary Control

About This Chapter

Follow the engaging text and video lessons in this chapter to learn more about budgetary control. After each lesson, try out a quiz to prepare yourself before moving to the next topic.

Budgetary Control - Chapter Summary and Learning Objectives

Developing budgets and controlling budgets is an essential task of managers. Determining when certain types of budgets are useful and tracking these budgets can help companies succeed. The Budgetary Control chapter is aimed at teaching you about this necessary subject. Our instructors will use brief text and video lessons to help you understand the terminology and concepts associated with budgets. Check your familiarity with the topics discussed by taking lesson quizzes. This chapter will outline topics including:

  • What static and flexible budgets are and when to use them
  • The vocabulary associated with budget controls
  • Different organizational structures and management styles
  • How to create a responsibility report
  • The formula for return on investment
  • What residual income is and why it is attractive
  • The process of strategic planning

Lesson Objective
Static Budget: Uses, Advantages & Limitations Decide why the static budget is useful and the types of businesses that use it.
Flexible Budgeting: Advantages & Explanation Evaluate flexible budgeting to better understand how it provides feedback on company performance.
Variances in Budgets: Definition, Calculations & Analysis Calculate and analyze variances in reports.
Budget Controls: Top-Down, Bottom-Up, Zero-Based & Flexible Budgeting Consider the importance of budget controls, and learn the essential vocabulary related to these controls.
How to Complete a Flexible Budget Performance Report Calculate and compose a flexible budget.
Responsibility Accounting: Benefits & Limitations Compare and contrast the advantages and disadvantages of responsibility accounting are.
Decentralized Organization: Definition & Chart Survey decentralized organizations to discover their strengths and weaknesses.
Creating a Responsibility Report for a Cost Center Construct a responsibility report and explain their significance for businesses.
Investment Center Evaluation: Formula & Residual Income Explain residual income and recognize the formula for return on investment.
Management by Exception: Definition, Principle & Examples Detail how management by exception is used to separate tasks between staff and management.
What Is Residual Income? - Definition, Model & Formula Investigate how residual income is earned and why it is attractive.
What Is the Strategic Planning Process? - Model, Steps & Examples Illustrate the steps involved in strategic planning.

7 Lessons in Chapter 12: Budgetary Control
Test your knowledge with a 30-question chapter practice test
Static Budget: Uses, Advantages & Limitations

1. Static Budget: Uses, Advantages & Limitations

This lesson examines the uses, advantages, and limitations of a static budget. We'll also discuss the implications of utilizing a static budget for controlling expenses and revenue.

Variances in Budgets: Definition, Calculations & Analysis

2. Variances in Budgets: Definition, Calculations & Analysis

What are variances in budgets, and why do we calculate them? In this lesson, we discuss what they are, why we care about them, and how to analyze variances in our own reports to obtain information we can use to improve our results.

Budget Controls: Top-Down, Bottom-Up, Zero-Based & Flexible Budgeting

3. Budget Controls: Top-Down, Bottom-Up, Zero-Based & Flexible Budgeting

In this lesson, we will explain the purpose of budget controls and explore several key related concepts including top-down budgeting, bottom-up budgeting, zero-based budgeting and flexible budgeting.

How to Complete a Flexible Budget Performance Report

4. How to Complete a Flexible Budget Performance Report

A flexible budget performance report can act as a report card on your department's flexible budget, letting people know what adjustments should be made to it for more accuracy in the future.

Responsibility Accounting: Benefits & Limitations

5. Responsibility Accounting: Benefits & Limitations

Unlike other accounting systems which focus on departments or divisions, responsibility accounting tracks the performance of each individual. As you might imagine, this has unique advantages and disadvantages.

Creating a Responsibility Report for a Cost Center

6. Creating a Responsibility Report for a Cost Center

There is one simple rule when it comes to writing a responsibility report for a cost center - keep costs low! In this lesson, you'll find out how to express that by using a responsibility report.

Investment Center Evaluation: Formula & Residual Income

7. Investment Center Evaluation: Formula & Residual Income

Investment centers are related to other responsibility centers, but their unique makeup means that there has to be a different way of evaluating them. In this lesson, we will learn how to do that.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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