The Non-Budgeting Control Device are as follows:
They are statistical data, special reports and analysis, breakeven analysis, internal audit, standard costs, ratio-analysis etc.
1. Statistical Data:
All needed and available data are collected and presented in tables, charts and graphs. Through them performances are assessed.
2. Special Reports and Analysis:
To analyse particular problem areas, special staff are appointed to collect information's.
3. Break-even Analysis:
This analysis shows the relationship of sales and expenses and the stage at what volumes of revenues cover expenses. If the ratio falls there would be loss.
4. Internal Audit:
This is one of the traditional non-budgetary control devices in vogue. Through internal audit various operations are appraised and deviations are detected.
5. Time-event, Network Analysis:
This is otherwise called as Programme Evaluation and Review Technique (PERT). Under this technique a project is divided into various units in a time sequence. For each event the 'critical path' is found, which is a sequence of events which takes the longest time and which involves the least slack time. Summarised events are given for top-management's perusal.
6. Standard Costs:
Standard costs are prepared working out the cost of materials and labour for each unit of the product adding a standard overhead rate. Variations in costs could be found comparing the standard costs.
7. Ratio Analysis:
Ratio analysis shows the relationship or proper mix up of one factor to the other. There are various relations used in financial analysis. They are net sales to working capital, net sales to inventory, quick ratio, current ratio, administrative expenses to sales, breakeven point etc.