The Cash Budget the cash budget is an important planning tool for businesses. Budgeted Balance Sheet prepared from information calculated in other budgets in the master budget. Feedback on Performance Feedback identified in the performance report should be interpreted carefully.
Variances identify differences.
Underlying reasons for these differences should be sought and appropriate action taken. In theory managers should only be responsible for controllable costs and revenues. Difficulties in Identifying Controllability. Sometimes uncontrollable items may be placed within a particular manager's responsibility. Uncontrollable items may make management change their behaviour.