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Hi Mr.Moffat..how are you I hope you will be fine..
I listened your lecture on Budgeting(Introduction lecture on budgeting)..I Want to know that who makes a budget?and why flexible budgets make after actual results?Please ExplainIs there any changes in your notes for september 2016?Can I use june 2016 Notes with your lectures…i will attempt CBE in august 2016…
You can use the June notes, because there are no changes to the syllabus.
If you watch all the lectures, then you will see that the reason for flexing the budget is so that it is then sensible to compare the actual results with the flexed budget when decided whether managers have performed well or badly.
why you put first sale budget in (introduction of budgeting)lecture?however i think production budget make first?what is the reason behind it..?
and my last question on budgeting is that.who is responsible for making budget?
I do explain this in the lecture! The first thing to budget is whatever is the principal budget factor – whatever it is that limits the activity of the business.
For most businesses, what limits the level of activity is the demand from customers – i.e the sales.
If you expect the demand to be (say) 10,000 units, then there is not much point in budgeting to produce (say) 20,000 units – how will you expect to sell them? 🙂You gave a good example thats why you are the best teacher.Now I understood completely thank you so much sir John..
who is responsible for making budget.Manager of responsibility centre or Management Accountant?
There are two basic approaches to the way budgets are prepared:
one approach is for top management to prepare the budgets and then to impose them on their managers. This is known as top-down budgetingthe alternative approach is to get the managers to prepare their own budgets and for top management to then approve them (after obviously due discussion). This is known as bottom-up budgeting.
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