A budget communicates a unit's values and priorities. Therefore, resource use should be associated with a unit's calculated plan. Knack, staff, students, and the campus administration may use the budget to determine whether resources are being properly and constructively used to attain the department's declared mission and objectives.
The budget is the statistical representation of an action plan for a particular time period. It expresses in dollars the action plan's future human and objects resource needs. Identified in the budget are the sources of funds (namely, revenue), such as tuition, endowment income, grants and contracts, and state appropriations, along with their planned uses (namely, expenses), such as salaries, benefits, supplies, and travel. A budget should be flexible enough to enable a unit to take advantage of unpredicted opportunities and survive the shock of unexpected fluctuations in planned resources.
Budgeting is the process of matching considered uses to available resources. The groundwork of a budget consists of estimates of the resources needed to deliver services and the costs of those resources. For example, in an academic department, student request expressed either in credit hours or head count enrollments will settle on
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(1) The number of faculty and staff needed to deliver instructional services,
(2) The courses taught,
(3) The number of course sections required, and
(4) The classroom and laboratory facilities required.
At a higher education institution in which research is a focus, faculty time and, therefore, cost must be allocated to research, along with the resources required to maintain research, such as graduate student financial support and corresponding grant support.
An academic department's budget may include support for open uses, such as instruction, as well as support for restricted uses, such as grants, contracts, and endowed scholarships. Resources whose use is limited by either a benefactor or an outside organization can only be budgeted and used for the specific purpose. Even though indefinite resources provide the maximum flexibility, contractual commitments to faculty and staff can bound the ability to shift even those resources from one use to another.
During the year, the budget is a tool for monitoring and controlling the generation and use of resources. By comparing authentic results with the budget plan, mid-course adjustments can be made as desired. The budget also provides the bases for the next year's budget and, as such, is a important tool for evaluating the accurateness of setting up assumptions
3.1.1 Methods adopt to setup Budget
There are two methods commonly used to setup Financial Budgeting Spreadsheets. Two methods "Bottom up Budget' and "Top down Budget" are adopted. Both methods provide the same objective to produce a precise Financial Budgeting Spreadsheets.
3.1.2 Bottom up Budget
The corporation let the all the managers of departments to come up with their own budget worksheet defensible by formulae, research and strategy. The organizations will do the first review of the worksheet. Once they have decided, the worksheet will be submitted to the Financial Planning Unit for more appraisals. During this evaluation process, the budget statistics will be fine tune. During this assessment stage is quite common for the worksheet to flow in and out between the particular sector and Financial plan Unit.
The Financial plan Unit finalize the worksheet, it will be submit to the Board of Directors (BODs) for final analysis and final approval. During the analysis by BODs, there may still be worksheet flow and backward to the BODs. The frequency of the reduced at this stage. Once the BODs finalize the budget figures, the financial budgeting worksheet will be final and ready to be implementing by the relevant departments.
3.1.3 Top down Budget
The Financial plan Unit uses the historical report such as Balance Sheets and Profit and Loss Statements, to come up with beginning budget worksheet. The Financial plan Unit will hold a meeting with the BODs and HODs and presents the beginning worksheet to all during this meeting, the worksheet will be discussed and fine the satisfaction of meeting. Once the meeting finalized, theÂ spreadsheets will be circulated to the respective departments for implementation and to draw up plans to achieve budget figures.
3.1.4 Pro and Con
Always on Time
Marked to Standard
Both methods are their pro and con. The "Bottom up Budget" slow but the budget worksheet tend to be more accurate all these level of the company staff, from bottom to top, are involved in the participation of the budget numbers.
The "Top down Budget" is faster but the budget worksheet are less accurate as the budget numbers are sure at top level meeting and the sharing of lower level staff are limited. The impact of this less accurate can be minimized by applying some financial efficient ratios and formulae to fine tune the final budget worksheet.
3.2 Budgeting Techniques
When an organization prepares budgets it used many techniques to make budget effective, efficient and long term beneficial. To prepare budget normally organizations used many techniques some of which are here under;
Zero based budgeting.
3.2.1 Incremental budgets
Budgets in which the statistics are based on those of the real expenditure for the previous year, with a proportion added for an inflationary upward trend for the Year. This is an easy method that saves time but it is the "lazy" way and is often inaccurate. This budgeting technique is only suitable for organizations where each year is very similar to the previous one in terms of activities. Very few dynamic organizations or projects are so stable that this budgeting technique really works for them.
3.2.2 Zero based budgeting
The zero based budget past figures are not used as the starting point. The budgeting process starts from "scrape" with the projected activities for the year. The result is a more full and correct budget, but it takes more time and energy to prepare a budget in this way. This technique is essential for new organization and projects, but it is also almost certainly the best route to go in a active organization that is proactive in taking on new challenges.
3.3 Cost Estimation
Rough calculate of the cost of product, plan, or project, computed on the basis of available information. Four common types of cost estimates are: (1) Planning estimate: rough calculation of cost within a sound range of values, prepared for information purposes only. Also called ball park estimate, (2) Budget estimate: rough calculation based on precise (but preliminary) cost data and recognized basics (3) Firm estimate: based on cost data is enough to enter into binding an agreement. (4) Not-to-exceed /Not-less-than estimate: maximum or minimum total required to realize a given task, based on firm cost estimation.
3.3.1 Cost estimation techniques
Many types of incur during the process of business. These types of costs which are three in number are explained here under,
"Variable Costs are those costs related with manufacturing that changes directly with the quantity of production, e.g., the direct material or labor necessary to accomplish the make or development of a product".
A fixed cost is the converse and it does not change dependence of production or sales on the total. E.g. lease or hire costs of the structure that the company uses a fixed cost. Mixed costs are a mixture of fixed and variable costs because the "consist fixed part and variable part". Cost is must be estimate for proper decision making but unfortunate decisions can be made. Three methods are used to estimate costs: high-low method, visual fit, and least square regression. "Use of the high-low method requires the use of only two past data observations: the highest level of activity (number of units produced during a time period) and the related total production cost incurred at that level, and the lowest level of the activity and its related cost".
3.4 Fixed and FlexibleÂ Budget
Fixed Budget is mostly used in the preparation stage to define the broad of management. Flexible budget, on the other hand is set for the volume of activity achieved, in other words the calculating stage. Budget are use for the different sector of the country the reason why we had flexible budget is because for most of the time, the level of behavior differ and as a result, the fixed budget differ by a set from the real result. For instance, in an event when the actual manufacture doubled as compare to fixed budget, the variable cost for the manufacture also doubled and the difference between the variable cost differed by a lot.
Chapter # 4 Cement industries
4.1 Overview of the Cement Industry
Chapter# 5 LITERATURE REVIEW
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Studies were recognized during academic institutions and large insurance companies' web pages for unpublished online information. For the widespread Internet search, the Google search engine was used. Moreover, online journals, websites and books were also searched for applicable articles. In this case, beside text word search "related articles", "similar article" and "cited by" functions were also used if these function were presented by the site. Also, local library catalogues were searched, and a manual search was performed using reference lists from relevant articles and book chapters. In addition, researchers of the field were contacted for relevant published and unpublished literature.
The following quality criteria were used to include a study:
Simplicity and facts of the account of the study results.
Clear description of the purpose of the study (e.g. Research question, aims and objectives of costing).
Clear description of the study methodology (e.g. Literature review methodology, assumptions applied, costing methodology, etc.).
Clear report of costing methodologies (perspectives, resource measurement, valuation, dealing with uncertainties, etc.)
Clear description of the source of data regarding unit costs and resource use.
Is equal to the achievement pricing of the product, including3 the costs of financing minus reduction. The accounting cost of a health service is its costs predictable by cost Accountants and economists use different cost concept. Accountants are concerned with measuring costs for financial planning and reporting purposes. Therefore, accountant's measure costs by the historical spend of funds. Practically the cost of the product share report. It encompasses direct and indirect costs (McGeehan 1993, Smith 2003).
Classically, explicit costs are cash expenditures, and implicit costs are non-cash costs. Explicit costs such as labor, rent, raw materials, and benefit are fairly easy to measure. On the other hand, implicit costs such as the opportunity costs of time and capital might be hard to estimate (Harshly 1995).Measuring accounting costs at organization or departmental level can be fairly simple. The quantity of opportunity costs for some costs items can too be simple (Smith 2003).
A process costing technique is worn in favor of Indus deception producing substance, oil, fabric, and flour, pharmaceutical, shoos and petroleum. There are several ways to estimate the unit costs of a scrupulous service. Selecting the suitable method depends on the type of service, the basis for costing and the cheap viability of cost computation. There is no generally customary suitable costing tactic. Unlike cost concepts and dissimilar price method should be old depending upon the idea for which cost information will be used (e.g. pricing, tax report, management control, internal cost containment decisions, supervisions, etc.) As a result, the cost of a meticulous service can vary significantly according to the reason of cost data for which it was generated.
Costing includes "the techniques and processes of ascertaining costs." The technique refers to ethics which are useful for ascertain costs of goods, jobs, processes and services. The process refers to date to date custom of formative costs inside the technique of estimate adopted by a trade activity.
Costing involves "the classifying, recording and proper share of expenses for the purpose of costs of goods or services; the relative of these expenditure to sales rate and the ascertainment of productivity".
The study perspective could affect the query difficulty addressed, the addition and omission of reserve items (costs), method chosen, and the numerical examination finished, a result or suggestion is supposed to be completed on the viewpoint of the study. The analysts should be apparent and open about whether the costing keep fit is performed from;
Customer (first party)
Provider (second party)
Purchaser (payer) (third party),
Employer or other sponsor (fourth party)
Numerous practical difficulties apply expressly to global evaluation of costing techniques in organization. These include;
Lack of clarity of cost concepts and technical terms used in the studies.
Discrepancies among the reading and tradition of industrial terms and practical principles (e.g. Intangible costs, overhead costs, marginal costs, etc).
Differences in organization of different cost items.
Variations in the insertion and omission of cost items.
Insufficient facts of the style used.
Variations in treatment of shared costs overhead portion.
The costing methods used in the idea force are highly qualified on the information obtainable in each of the participate countries, and the imperfect resources available to start the analysis. These should include: The perspective taken (provider) Choice of providers The role of prices The time horizon Portion of overheads The main purpose of this research is to develop a mechanism wherein the effectiveness uses of the costing techniques within an organization. A research protocol was developed which comprises a literature search strategy, inclusion and exclusion criteria, and data extraction and combination methods. Studies were acknowledged through electronic search of some databases, local library files and orientation lists of in print articles, as well as books. The literature search was extensive to Internet websites of governments, This research will presents the regulatory framework, enforcement of accounting standards, effectiveness uses of the costing techniques, capacity-building issues and lessons learned in the process. This research work used the data collection from the accounting articles related to the subject problem which is "the effectiveness of uses of the costing techniques within an organization". The research has used the longitudinal study approach for data collection and qualitative observation mode. Thus an opportunity for a critical study of the effectiveness costing techniques within an organization is identified.
Bangladeshi organization has adapted to the new lasted technique for research in management accounting development practices. A good technique are well balanced in the practices of irrespective sector may be an enhanced through compulsory statement in Bangladesh management accounting practices development of the manufacturing sector.
There is an agreement that management accounting practice has changed ultimately, changed more newly. Before the studies have use postal survey to be recognizing the management accountant position today. The minority survey to find out reliable use of technique. Conventional survey has the disadvantages of the survey released on the person with information willingly respond.
the organization in all over the world. The globalization is increase the complication business with the high power technology which is used in system to newly development technique management accounting in all over the world. Previous study which is showing the privatization and trustworthy statement had to be contributing in the development in Bangladesh management accounting. That is the survey result of present management accounting practices in listed manufacturing sector reveals the state of sophistic technique which use to target costing for customer to life cycle costing in manufacturing and the customer is not satisfied
The study has go through out the reason can be given details the limited Development use of accounting system. Until beginning of the 1980's, firstly it was point out the cover in the economical, political and social Transformation allows stability of the values of the traditional Spanish society. Until the beginning of the 1980's the organizational culture lack the modern values that favor the use of accounting system. the direction toward in the future, the standardize individualism and the rationalism On the contrary, until the 1980's in the companies the control was performed in direct way formal structure, paternalism and meeting of posts based on trus