You are a manager in a fictitious company of your choice. Your director has aske

Question

You are a manager in a fictitious company of your choice. Your director has asked you to explain to the department staff the different types of budgets and techniques in order to provide an overall understanding.

For this assignment, you must develop a 2 to 3-page narrative that you will deliver to the department staff and director explaining the different kinds of budgets. Please select or make up your company and its purpose. You will also recommend which type of budget should be used and which budgeting technique would best fit the company. Using an income of 1 Million per year, you must answer the following questions:

What are the various kinds of budgets? Please explain each.

Which type of budget is best for your selected company?

Which type of calendar year will you choose and why?

Remember to use the library or other credible resources to support your argument. Be sure to cite your sources using the correct standard of APA.

Explanation / Answer

Ans

Ans 1

Company - Intelse Manufacturing Company

Manufactures Computer chips

Ans 2

Kinds of budgets

1. Fixed budgets - Where budgets are prepared for one activity level and variance are reported with reference to that.Useful when the actual level does not deviate from the budgeted level. The disadvantage of the theis kind of budget is the lack of flexibility.

2.Flexible Budget- These are budgets which are adjusted for actual level of activity and all the input variances are reported with reference flexible budget. Flexible budget operate and give best results along with system of standard costing.

Ans 3

Flexible budget along with standard costing system is better for the company because

1. It provides variance broken down to different componets such as price and efficency variance for various factors of production,admin and selling.

Ans 4

Calendar year which would coincide with the financial year since it would facilitate the comparison with the financial statement figures,

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