About This Chapter
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
|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.|
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.
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.
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.
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.
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.
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.
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.
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Other chapters within the Accounting 301: Applied Managerial Accounting course
- Corporate Governance for Managerial Accounting
- Financial Statements & Balance Sheets
- Cost Classifications
- Manufacturing Overhead Cost Allocation
- Job Order Cost System
- Process Cost System
- Activity-Based Costing
- Cost-Volume-Profit Analysis
- Decision Making in Managerial Accounting
- Pricing Objectives & Methods
- Standard Costs
- Capital Budgeting
- Statement of Cash Flows
- Financial Statement Analysis
- Software for Managerial Accounting
- Required Assignments for Accounting 301
- Studying for Accounting 301