Lecture Notes Chapter Twenty Four Overview of Budgeting A budget is a detailed plan for acquiring and using financial and other resources over a specified period. Control, which involves the steps taken by management to attain the objectives set down at the planning stage. Budgeting forces managers to give planning top priority.
Budgets provide a means of allocating resources to their most effective uses.
Budgeting uncovers potential bottlenecks. Budgeting coordinates the activities of the entire organization. Budgeting provides goals that serve as benchmarks for evaluating subsequent performance. The master budget is a formal summary of the company s plans. It sets specific targets for sales, production, material purchases, and financing activities.