Facebook Pixel Code
x
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Flow of a Budget and the Differences between Traditional Costing and ABC Costing Technique Essay Example

Show related essays

Flow of a Budget and the Differences between Traditional Costing and ABC Costing Technique

This is a preview of the 5-page document
Read full text

Flow of a Budget and the Differences between Traditional Costing and ABC Costing Technique. A true budget hence portrays the business’s true worth and potential. Each budget committee member also makes sure that the budget is appraised and reviewed regularly, for instance, every month. This calls for even more timely collection of data and keeps the committee on track with the latest trends in financial costs inclinations. The budget committee hence helps in saving a lot of time and money and keeps the entire business organized. (Brian Tracy, 2004).By, the flow of a budget, it is meant how basically a budget is prepared. This calls for an outlining of things that come first or are considered first when making a budget, second, third and so on. A budget as mentioned above undertakes many important goals and deals with different types of financial trends, costs, analysis and decision making etc.

The stages involved in the flow of a budget are as follows: Sales value (estimated): The first thing that a budget undertakes or includes in itself, is the probable amount of sales in value for the month the budget is being made for. This is based on a complete analysis of the marketing and sales function of the business. Hence, the data involved here is that of a number of goods sold, amount spent on advertising and marketing etc. There are usually written or recorded by a high, medium and low sales tag (estimated sales that are. Operating Costs: this is the second part of the budget. This illustrates what the business has spent on regular everyday expenses and how much. These costs can be related to the human resource department or even the production or dispatch/delivery department etc. from heating and lighting, to cost of fuel to salaries of employees, all come under the tag “operating costs”. A budget hence deals with these different costs listed clearly as follows: Profit or Loss (monthly): this part of the budget includes the cumulative profit or loss from operations of that month only. This step is useful for the budget committee for analysis purposes that it does later at the end of the year usually to find out the broad trends and inclinations in sales, profit, revenue, and losses.   . Flow of a Budget and the Differences between Traditional Costing and ABC Costing Technique.

This is a preview of the 5-page document
Open full text

Works Cited

1. Sigel, Gary. “What do management accountants do?” Strategic Finance Publication. 2000. All Business. August, 17, 2008. http://www.allbusiness.com/accounting-reporting/managerial-accounting/605863-1.html

2. QandAs- Legal. “What does an accountant do?” QandAs. (n.d.) August, 17, 2008. http://legal.qandas.com/personal-taxes/what-does-an-account-do.html

3. LearningMatters. “Calculating Payback Period”. LearningMatters. (2008) Echelon Learning Ltd. August, 17, 2008. http://www.learningmatters.com/idx/7741/index.html

4. Masego Matseke. “Payback Period”. (n.d.) 12Manage. August, 17, 2008. http://www.12manage.com/methods_payback_period.html

5. Carsten Homburg. “A note on optimal cost driver selection in ABC”. ScienceDirect. 2002. Academic Press. August, 17, 2008. http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6WMY-456JPDV-B&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_version=1&_urlVersion=0&_userid=10&md5=883baf2da051b21acf9381152ac7eeb5

6. BNET. “Cost Driver”. BNET Business Dictionary. (n.d.) CNET Networks Inc. August, 17, 2008. http://dictionary.bnet.com/definition/cost+driver.html

7. FMAccounting. “Difference between ABC system versus traditional based costing system”. Financial, Management and Accounting. (n.d.) August, 17, 2008. http://fmaccounting.com/difference-between-abc-system-versus-traditional-based-costing-system/

8. Brian Tracy. “Drafting your budget”. Entrepreneur Connect. 2004. Entrepreneur.com Inc. August, 17, 2008. http://www.entrepreneur.com/money/article72918.html

Close ✕
Tracy Smith Editor&Proofreader
Expert in: Macro & Microeconomics, E-Commerce, Business
Hire an Editor
Matt Hamilton Writer
Expert in: Macro & Microeconomics, Finance & Accounting, Human Resources
Hire a Writer
preview essay on Flow of a Budget and the Differences between Traditional Costing and ABC Costing Technique
WE CAN HELP TO FIND AN ESSAYDidn't find an essay?

Please type your essay title, choose your document type, enter your email and we send you essay samples

Contact Us