Cost Analysis and Budgetary Anaysis

8/8/2019 Cost Analysis and Budgetary Anaysis

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SUNEETHA.S.C

4PS09MBA56


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` According to Wheldon,Costing is the classifying,

recording and appropriate allocation of expenditure for

the determination of costs of products or services and

for the presentation of suitably arranged data for

purposes of control and guidance of management

`

` The institute of cost and management accountants

(ICMA), London, defined costing as the technique

and process of ascertaining costs.


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` Cost ascertainment:

` Cost accounting:

` Cost control:


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`

` To ascertain cost per unit of the different productsmanufactured by a business concern.

` To provide a correct analysis of cost both by process or

operation and by different element of cost.` To provide requisite data and serve as a guide to price

fixing of products manufactured or services rendered.

` To ascertain the profitability of each of the product andadvice management as to how these profits can be

maximized.` To advice management on future expansion policies and

proposal capital projects.


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` INTRODUCTION

`

` Planning is the basic managerial function. It helps in

determining the course of action to be followed forachieving the organizational goals. It is decision in

advance; what to do, who to do and who will do the

task. Plans are framed to achieve the better results.

Every business enterprise needs the use of control

techniques for economic world. Hence, the budgetsare the most important tool of profit planning and

control


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` A budget is the monetary and or quantitative

expression of business plan and policies to be

pursued in the future period of time.

`

` According to CIMA, Official Terminology A

Budget is financial and or quantitative statement

prepared prior or a defined period of time, of the

policy to be pursued during that period for thepurpose of attaining the given objective.


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` Budgeting` Budgeting is the whole process of designing implementing

and operating budgets. The main emphasis in this is short-term budgeting process involving the provisions ofresources to supply plans, which are being implemented.

`

` Budgeting control` Budgeting control is the process of determining various

budgeted figures for the enterprise for the future period andthen comparing the budgeted figures with the actual

performance for calculating variances if any. A budget is ameans and budgetary control is the end result.


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` Tools for measuring performance :

` Maximization of profits

` Specific aims

` Economy` Determining weakness


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` Uncertain future

` Budgetary revisions required

` Discourages efficient persons

` Depends upon support of top management


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`

` Organization for budgeting

` Budget manual theory


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` A Standard costing system combined with budgets constitutesthe most solid foundation for the achievements of multiple tasksand goals of the modern business. Standard costs are the logicalout growth of the general use of perfomance standards. Which isfound in most areas every business enterprise is deciding inadvance what to do, when to do, how to do, who do the task ofthe entire organisation. Budgets upsets written operational planof management expressed in terms of money and quantity it is apolicy followed during the budget period for the attainment oforganisational objectives standard costing and budgeting are themost important techniques of cost accounting that an enterprisesshould follow to surview in highly competative and changing

economic world


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`Thank You

Cost Analysis and Budgetary Anaysis

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