1. Budgeting Overview
• Budgeting assists management in:
• Planning and setting objectives
• Performance measurement
• Motivation
2. Advantages of Budgeting
• Provides a standard for performance evaluation
• Improves communication and coordination
• Helps in resource allocation and decision-making
3. Participative Budgeting
When many employees are involved in the budgeting process, it is called participative
budgeting. This approach improves employee motivation and accuracy.
4. Responsibility Accounting
This concept means managers are accountable only for the things they can control
expenses, resources, or results under their authority.
5. Performance Centers
• Cost Center: Controls cost only
• Profit Center: Controls cost and revenue
• Investment Center: Responsible for ROI (Return on Investment)
• Budgeting assists management in:
• Planning and setting objectives
• Performance measurement
• Motivation
2. Advantages of Budgeting
• Provides a standard for performance evaluation
• Improves communication and coordination
• Helps in resource allocation and decision-making
3. Participative Budgeting
When many employees are involved in the budgeting process, it is called participative
budgeting. This approach improves employee motivation and accuracy.
4. Responsibility Accounting
This concept means managers are accountable only for the things they can control
expenses, resources, or results under their authority.
5. Performance Centers
• Cost Center: Controls cost only
• Profit Center: Controls cost and revenue
• Investment Center: Responsible for ROI (Return on Investment)
