3.4 Budgeting (HL)
Task 1 - Budgeting presentation
Resource 1 - Budgeting chapter from Hall, Jones et al
Resource 2 - Zero-based budgets and the pros & cons of budgeting from Hall, Jones et al
Task 2 - Agarka mini-market question from Hall, Jones et al
Variance Analysis
The difference between the budgeted amount and the actual amount is known as the variance. As part of controlling budgets managers try to account for any variances that take place.
Variance = Actual outcome - Budgeted outcome.
Variances can be favourable or adverse. A favourable variance occurs when the actual figures are better than expected. Managers then attempt to understand the reasons for the variances (variance analysis). Understanding the causes can lead to more effective decision-making in the future.
Task 3 - Variance question - Armstrong Ltd
Resource 1 - Budgeting chapter from Hall, Jones et al
Resource 2 - Zero-based budgets and the pros & cons of budgeting from Hall, Jones et al
Task 2 - Agarka mini-market question from Hall, Jones et al
Variance Analysis
The difference between the budgeted amount and the actual amount is known as the variance. As part of controlling budgets managers try to account for any variances that take place.
Variance = Actual outcome - Budgeted outcome.
Variances can be favourable or adverse. A favourable variance occurs when the actual figures are better than expected. Managers then attempt to understand the reasons for the variances (variance analysis). Understanding the causes can lead to more effective decision-making in the future.
Task 3 - Variance question - Armstrong Ltd