Budgetary control primarily involves comparing ___ with actual performance to determine variances.

Budgeted figures

True or False: Budgetary control is a one-time process that does not require continuous monitoring.

False. Budgetary control is a continuous process that helps in planning and coordination.

The establishment of budget centres is essential for ___ and ___ purposes.

Cost control and performance appraisal

What is the primary objective of budgetary control in an organization?

To ensure effective planning and coordination by setting up various budgets to anticipate requirements and expected performance.

Fill in the blank: A budget manual specifies the duties and responsibilities of various executives concerned with the ___ process.

Budgeting

What role does the budget officer play within the budgetary control system?

The budget officer coordinates the budgets of different departments, scrutinizes budget proposals, and monitors actual performance against budgets.

True or False: The budget period is fixed and does not vary based on the type of budget or industry.

False. The budget period can vary depending on the type of budget and other factors such as economic conditions.

What is meant by the term 'key factor' in budgetary control?

A key factor is a constraint that influences the preparation of all related budgets, often determining the limits of production or sales.

Fill in the blank: One of the advantages of budgetary control is the maximization of ___ through coordinated planning of resources.

Profits

Explain how budgetary control can help in identifying weaknesses within an organization.

Budgetary control identifies organizational weaknesses.

• Compares budgeted vs. actual results.

• Highlights deviations needing attention.

• Facilitates corrective management actions.

Which of the following is NOT a limitation of budgetary control: uncertain future, frequent revision of budgets, or guaranteed success?

Guaranteed success

True or False: Budgetary control eliminates the need for top management support.

False. The success of budgetary control heavily depends on the support and involvement of top management.

Fill in the blank: Budgetary control creates budget consciousness among employees by fixing ___ for them.

Targets

What is the significance of the budget committee in the budgetary control process?

The budget committee ensures alignment.

• Coordinates departmental budgets effectively.

• Monitors budget execution closely.

• Aligns goals with organizational objectives.

Fill in the blank: One primary objective of budgetary control is the elimination of ___ and increase in profitability.

Wastes

Explain how budgetary control serves as a tool for measuring performance.

By setting budgeted targets, organizations can compare actual results against those targets, facilitating performance evaluation and accountability.

True or False: Conflicts among departments can arise as a result of budgetary control.

True. Departments may prioritize their own goals over the overall business objectives, leading to conflicts.

What are budget centres and why are they important?

Budget centres are specific parts of an organization for which budgets are prepared, essential for effective cost control and performance evaluation.

Fill in the blank: The primary aim of budgetary control is to ensure ___ of resources through effective planning.

Economy

What is the role of the Chief Executive in the budgetary control system?

The Chief Executive oversees the budgetary system and constitutes the budget committee for preparing realistic budgets.

True or False: Budgetary control is solely focused on financial aspects and does not consider operational efficiency.

False. Budgetary control also aims to operate cost centres and departments with efficiency and economy.

What corrective measures can be taken when actual performance falls short of budgeted norms?

Management can take immediate remedial actions to address discrepancies and improve performance.

Fill in the blank: The process of budgetary control includes the preparation of budgets, coordination of departments, and comparing ___ performance.

Actual

How does budgetary control contribute to the overall economy of a business?

By ensuring systematic planning of expenditure and optimal use of resources, budgetary control reduces waste and improves profitability.

True or False: Budgetary control requires no adjustments once budgets are set.

False. Budgets may require revisions due to changing conditions and uncertainties in the future.