Budget, Budgeting, and Budgetary Control: Meaning, features, Importance, Classification, Flexible Budget: Format, Process (बजट, बजटिंग, बजटरी कंट्रोल: आशय, विशेषताएं, उद्देश्य, वर्गीकरण, लोचदार बजट: प्रारूप)

Budget, Budgeting, and Budgetary Control: Meaning, features, Importance, Classification, Flexible Budget: Format, Process,

Key Points:

1.Meaning of Budget.

2. Characteristics and features of the Budget.

3. Meaning of Budgeting.

4. Meaning of Budgetary Control.

5. Objectives /Importance of Budgetary Control.

6. Classification of Budget.

7. Format of Flexible Budget.

8. Process of calculating fixed costs, semi-variable costs, and variable costs for a flexible budget.

Link : https://smckk14.blogspot.com/2023/09/cost-volume-profit-analysis-meaning.html

 

1. Meaning of Budget:

A budget is a statement of the future of an organization, industry, or business prepared to achieve its objectives over a period of time. The form of a budget is numerical or monetary.

2. Characteristics and features of the Budget:

(i) It is prepared for a certain period of time in the future.

(ii) Its nature is numerical and monetary.

(iii) It is prepared to achieve the objectives of the institution, industry, or business.

(iv) The budget is prepared keeping in mind the policies and plans of the management.

(v) Budgets can be prepared for short-term and long-term periods.

(vi) A budget can be prepared as per future requirements.

(vii) A budget is considered a kind of forecast.

3. Meaning of Budgeting:

'Budgeting' is a managerial process that involves all budget-related activities. Budget preparation, budget control, budget coordination, future problems, etc.

4. Meaning of Budgetary Control:

'Budgetary control' is a process of managerial control in which planning, direction, and coordination are determined on the basis of a budget. If differences are found in the results, the results are controlled by revising the budget.

5. Objectives /Importance of Budgetary Control:

(i) The main objective of budgetary control is to prepare a plan of action before starting the work.

(ii) All types of costs and expenses have to be controlled.

(iii) Policies are determined by budgeting in any business.

(iv) Budgetary control helps in decision-making.

(v) The cost or expense is divided into three parts by budgeting. (i) Fixed cost; (ii) Variable cost; and (iii) Semi-variable cost.

(vi) Budgeting is an important process to achieve the objectives of the business.

(vii) Establishes coordination among various departments to achieve pre-determined targets.

(viii) Budgeting controls the problems (volatility, finance, control over liquidity, limited resources, etc.) from the beginning to the end of production.

6. Classification of Budget:

(i) On the basis of Time:

(a) The Long-Term Budget:

If the duration of the budget is 5 years or more, it is called a "Long-Term Budget".  For example - Capital Budget, Research and Development Budget.

(b) Short-Term Budget:

If the duration of the budget is one year, it is called a "Short-Term Budget". For example - Cash Budget, Material Budget, etc.

(c) Very Short-Term Budget:

If the duration of the budget is one month or a few months, it is called a "Very Short-Term Budget".

(ii) On the basis of Flexibility:

(a) Fixed Budget: 

A budget based on only one level of business activity is called a "Fixed Budget".  

(b) Flexible Budget:

A budget based on different levels of business activity is called a "Flexible Budget". Levels of activity refer to the quantities produced or sold.

(iii) On the basis of the Function:

(a) Master Budget:

A 'Master Budget' is an integrated budget that combines all the departmental budgets of an organization.

(b) Departmental Budget:

If budgets are made on the basis of departments, it is called a "Departmental Budget" or "Subsidiary Budget".

Types of Departmental Budgets:

(i) Sales budget; (ii) Production budget; (iii) Cost budget; etc.

(iv) On the basis of Limit:

(a) Complete Budget:

The budget prepared for each department is called the "Complete Budget".  

(b) Partial /Partly Budget:

The budget prepared for a particular department is called a "Partial /Partly Budget".  

(v) General Budget:

(a) Supplementary Budget:

The budget prepared using the surplus amount is called a "Supplementary Budget".

(b) Zero-Based Budget:

This is the most innovative technique for preparing a budget. The budget prepared on the basis of zero is called the "Zero-Based Budget". It is not prepared on the basis of old data.

7. Format for Flexible Budget:

Flexible Budget

Particular	Activity of Present Level	Activity of Budgeted Level
(A) Fixed Expenses /Cost
Salaries	-	-
Depreciation	-	-
Total Fixed Expenses /Cost	xxx	xxx
(B) Semi Variable Expenses /Cost
Selling Expenses (50% fixed)	-	-
Distribution Expenses (40% variable)	-	-
Total Semi Variable Expenses /Cost	xxx	xxx
(C)  Variable Expenses /Cost
Direct Material	-	-
Direct Labour	-	-
Total Variable Expenses /Cost	xxx	xxx
Total Cost (A + B + C)	xxx	xxx
Profit (+) or Loss (-)	-	-
Sales	xxx	xxx

8. Process of calculating fixed costs, semi-variable costs, and variable costs for a flexible budget:

(i) Fixed Cost /Expenses:

Fixed cost /expense remain the same at all levels of the budget from the present level.

Example - If production at 50% capacity (5000 units)

Fixed expenses - Salaries ₹ 1000, Depreciation ₹ 2000

Determine the value of fixed expenses for 60%, 100% capacity.

Solution -

If 50% capacity = 5000 Units

therefore 60% capacity = 5000 × 60 ÷ 50 = 6000 Units

Particular	capacity
	50% or 5000 Units	60% or 6000 Units	100% or 10000 Units
Fixed Expenses /Cost -
Salaries	₹1000	₹1000	₹1000
Depreciation	₹2000	₹2000	₹2000
Total Fixed Expenses /Cost	₹3000	₹3000	₹3000

(ii) Semi-Variable Cost /Expenses:

If some part of the cost /expenses is fixed and the remaining part is variable, then it is called a Semi-Variable Cost.

Example - If production at 50% capacity (5000 units)

Semi Variable Expenses /Cost -

Administrative expenses (40% fixed) = ₹ 10000.

Determine the value of semi variable expenses for 60% or 100% capacity.

Solution -

If 50% capacity = 5000 Units

therefore 60% capacity = 5000 × 60 ÷ 50 = 6000 Units

Particular	capacity
	50% or 5000 Units	60% or 6000 Units	100% or 10000 Units
Semi Variable Expenses /Cost -
Administrative expenses	₹10000	₹11200	₹16000
Total Fixed Expenses /Cost	₹10000	₹11200	₹16000

Note -

Adm. exp. at 50% capacity or 5000 units = ₹10000

Less - Fixed portion (40% on ₹10000)     =  ₹4000

Variable Adm. exp. at 50% capacity or 5000 units = ₹6000

If variable adm. exp. at 50% capacity = ₹6000

therefore 60% capacity = ₹6000 × 60 ÷ 50 = ₹7200

Adm. exp. at 60% capacity or 6000 units = (₹4000 + ₹7200) = ₹11200

therefore 100% capacity = ₹6000 × 100 ÷ 50 = ₹12000

Adm. exp. at 100% capacity or 10000 units = (₹4000 + ₹12000) = ₹16000.

(iii) Variable Cost /Expenses:

If the cost /expense changes according to the quantity produced, it is called a Variable Cost. The cost per unit is constant at every stage of production.

Example - If production at 50% capacity (5000 units)

Variable Expenses /Cost -

Direct Material = ₹ 10000.

Determine the value of variable expenses for 60% or 100% capacity.

Solution -

If 50% capacity = 5000 Units

therefore 60% capacity = 5000 × 60 ÷ 50 = 6000 Units

Particular	capacity
	50% or 5000 Units	60% or 6000 Units	100% or 10000 Units
Variable Expenses /Cost -
Direct Material	₹10000	₹12000	₹20000
Total Fixed Expenses /Cost	₹10000	₹12000	₹20000

Note -

If direct material at 50% capacity = ₹10000

therefore 60% capacity = ₹10000 × 60 ÷ 50 = ₹12000.

If direct material at 50% capacity = ₹10000

therefore 100% capacity = ₹10000 × 100 ÷ 50 = ₹20000.

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बजट, बजटिंग, बजटरी कंट्रोल: आशय, विशेषताएं, उद्देश्य, वर्गीकरण, लोचदार बजट: प्रारूप

प्रमुख बिंदु:

1.बजट से आशय

2. बजट की विशेषताएं

3. बजटिंग से आशय

4. बजटरी कंट्रोल से आशय

5. बजटरी नियंत्रण के उद्देश्य

6. बजट का वर्गीकरण

7. Format for Flexible Budget

8. Process of calculating fixed costs, semi-variable costs, and variable costs for a flexible budget

Link : https://smckk14.blogspot.com/2023/09/cost-volume-profit-analysis-meaning.html

 

1. बजट से आशय:

बजट एक ऐसा विवरण पत्र होता है, जिसमें किसी संस्था /उद्योग /व्यापार के भविष्य में एक निश्चित अवधि के दौरान उद्देश्य प्राप्ति के लिए तैयार किया जाता है। जिसका स्वरूप संख्यात्मक अथवा मौद्रिक होता है।

2. बजट की विशेषताएं:

(i) भविष्य में निश्चित अवधि के लिए तैयार किया जाता है। 

(ii) इसका स्वरूप संख्यात्मक एवं मौद्रिक होता है। 

(iii) संस्था /उद्योग /व्यापार के उद्देश्य प्राप्ति के लिए तैयार किया जाता है। 

(iv) बजट प्रबंध की नीतियों और योजनाओं को ध्यान में रखकर तैयार किया जाता है। 

(v) बजट अल्पकालीन और दीर्घकालीन अवधि के लिए तैयार किया जा सकता है। 

(vi) बजट भविष्य की आवश्यकताओं के अनुसार तैयार किया जा सकता है। 

(vii) बजट एक प्रकार का पूर्वानुमान माना जाता है।

3. बजटिंग से आशय:

बजटिंग एक प्रबंधकीय प्रक्रिया है जिसमें बजट से संबंधित सभी क्रियाएं शामिल होती हैं। जैसे - बजट की तैयारी, बजट नियंत्रण, बजट समन्वय और भविष्य की समस्याएं इत्यादि। 

4. बजटरी कंट्रोल से आशय:

बजटरी नियंत्रण प्रबंधकीय नियंत्रण की एक ऐसी प्रक्रिया है जिसमें बजट के आधार पर नियोजन, निर्देशन एवं समन्वय को निर्धारित किया जाता है। यदि परिणामों में अंतर पाया जाए, तो बजट को संशोधित कर परिणामों को नियंत्रित किया जाता है। 

5. बजटरी नियंत्रण के उद्देश्य:

(i) बजटरी नियंत्रण का प्रमुख उद्देश्य कार्य प्रारंभ करने के पूर्व, कार्य की रूपरेखा तैयार करना होता है। 

(ii) सभी प्रकार के लागतों /व्ययों को नियंत्रित करना होता है।

(iii) किसी भी व्यवसाय में बजटिंग के द्वारा नीतियों का निर्धारण किया जाता है। 

(iv) बजटिंग निर्णयन में सहायता प्रदान करता है। 

(v) बजटिंग के द्वारा लागत /व्यय को तीन भागों में विभाजित किया जाता है। (i) स्थायी लागत, (ii) परिवर्तनशील लागत एवं (iii) अर्द्ध परिवर्तनशील लागत।

(vi) बजटिंग व्यवसाय के उद्देश्यों को पूरा करने के लिए महत्वपूर्ण प्रक्रिया है। 

(vii) पूर्व निर्धारित लक्ष्यों को पूरा करने के लिए विभिन्न विभागों के बीच समन्वय स्थापित करता है। 

(viii) बजटरी नियंत्रण, उत्पादन के प्रारंभ से लेकर अंत तक आने वाली समस्याओं (अस्थिरता, वित्त व्यवस्था, तरलता पर नियंत्रण, सीमित संसाधन इत्यादि) पर नियंत्रण करता है। 

6. बजट का वर्गीकरण:

(I) समय के आधार पर बजट:

(a) दीर्घकालीन बजट:

यदि बजट की अवधि 5 वर्ष या इससे अधिक होती है, उसे "दीर्घकालीन बजट" कहते हैं।  उदाहरण स्वरूप - पूंजीगत बजट, शोध एवं विकास बजट। 

(b) अल्पकालीन बजट:

यदि बजट की अवधि 1 वर्ष की होती है, उसे "अल्पकालीन बजट" कहते हैं। उदाहरण स्वरूप - रोकड़ बजट, सामग्री बजट इत्यादि। 

(c) अति अल्पकालीन बजट:

यदि बजट की अवधि 1 माह या कुछ माह की होती है, उसे "अति अल्पकालीन बजट" कहते  हैं।

(II) लोच के आधार पर:

(a) स्थायी बजट:

व्यवसायिक क्रियाशीलता के केवल एक स्तर पर आधारित बजट को "स्थायी बजट" कहते हैं। 

(b) लोचदार बजट:

व्यवसायिक क्रियाशीलता के विभिन्न स्तरों पर आधारित बजट को "लोचदार बजट" कहते हैं। क्रियाशीलता के स्तरों से आशय उत्पादन अथवा विक्रय के मात्राओं से है। 

(III) कार्य के आधार पर:

(a) मास्टर बजट:

किसी संस्था के सभी विभागीय बजट में समन्वय स्थापित कर बनाया गया एकीकृत बजट को "मास्टर बजट" कहते हैं। 

(b) विभागीय बजट:

यदि बजट विभागों के आधार पर बनाए जाते हैं, उसे "विभागीय बजट" या "सहायक बजट" कहते हैं। 

विभागीय बजट के प्रकार:

(i) विक्रय बजट, (ii) उत्पादन बजट, (iii) लागत बजट इत्यादि

(IV) सीमा के आधार पर:

(a) पूर्ण बजट:

प्रत्येक विभाग के लिए बनाया गया बजट पूर्ण बजट कहलाता है। 

(b) आंशिक बजट:

किसी विशेष विभाग के लिए तैयार किया गया बजट आंशिक बजट कहलाता है। 

(V) सामान्य बजट:

(a) अनुपूरक बजट:

अतिरिक्त राशि का उपयोग कर बनाया गया बजट "अनुपूरक बजट" कहलाता है। 

(b) शून्य आधारित बजट:

यह बजट तैयार करने करने की सबसे नवीन तकनीक है। शून्य को आधार मानकर तैयार किया गया बजट "शून्य आधार बजट" कहलाता है। यह बजट में पुराने आंकड़ों के आधार पर तैयार नहीं किया जाता है।

7. Format for Flexible Budget:

Flexible Budget

Particular	Activity of Present Level	Activity of Budgeted Level
(A) Fixed Expenses /Cost
Salaries	-	-
Depreciation	-	-
Total Fixed Expenses /Cost	xxx	xxx
(B) Semi Variable Expenses /Cost
Selling Expenses (50% fixed)	-	-
Distribution Expenses (40% variable)	-	-
Total Semi Variable Expenses /Cost	xxx	xxx
(C)  Variable Expenses /Cost
Direct Material	-	-
Direct Labour	-	-
Total Variable Expenses /Cost	xxx	xxx
Total Cost (A + B + C)	xxx	xxx
Profit (+) or Loss (-)	-	-
Sales	xxx	xxx

8. Process of calculating fixed costs, semi-variable costs, and variable costs for a flexible budget:

(i) Fixed Cost /Expenses:

Fixed cost and expense remain the same at all levels of the budget from the present level.

Example - If production at 50% capacity (5000 units)

Fixed expenses - Salaries ₹ 1000, Depreciation ₹ 2000

Determine the value of fixed expenses for 60%, 100% capacity.

Solution -

If 50% capacity = 5000 Units

therefore 60% capacity = 5000 × 60 ÷ 50 = 6000 Units

Particular	capacity
	50% or 5000 Units	60% or 6000 Units	100% or 10000 Units
Fixed Expenses /Cost -
Salaries	₹1000	₹1000	₹1000
Depreciation	₹2000	₹2000	₹2000
Total Fixed Expenses /Cost	₹3000	₹3000	₹3000

(ii) Semi-Variable Cost /Expenses:

If some part of the cost is fixed and the remaining part is variable, then it is called a "Semi-Variable Cost".

Example - If production at 50% capacity (5000 units)

Semi Variable Expenses /Cost -

Administrative expenses (40% fixed) = ₹ 10000.

Determine the value of semi variable expenses for 60% or 100% capacity.

Solution -

If 50% capacity = 5000 Units

therefore 60% capacity = 5000 × 60 ÷ 50 = 6000 Units

Particular	capacity
	50% or 5000 Units	60% or 6000 Units	100% or 10000 Units
Semi Variable Expenses /Cost -
Administrative expenses	₹10000	₹11200	₹16000
Total Fixed Expenses /Cost	₹10000	₹11200	₹16000

Note -

Adm. exp. at 50% capacity or 5000 units = ₹10000

Less - Fixed portion (40% on ₹10000)     =  ₹4000

Variable Adm. exp. at 50% capacity or 5000 units = ₹6000

If variable adm. exp. at 50% capacity = ₹6000

therefore 60% capacity = ₹6000 × 60 ÷ 50 = ₹7200

Adm. exp. at 60% capacity or 6000 units = (₹4000 + ₹7200) = ₹11200

therefore 100% capacity = ₹6000 × 100 ÷ 50 = ₹12000

Adm. exp. at 100% capacity or 10000 units = (₹4000 + ₹12000) = ₹16000.

(iii) Variable Cost /Expenses:

If the cost or expense changes according to the quantity produced, it is called a "Variable Cost". The cost per unit is constant at every stage of production.

Example - If production at 50% capacity (5000 units)

Variable Expenses /Cost -

Direct Material = ₹ 10000.

Determine the value of variable expenses for 60% or 100% capacity.

Solution -

If 50% capacity = 5000 Units

therefore 60% capacity = 5000 × 60 ÷ 50 = 6000 Units

Particular	capacity
	50% or 5000 Units	60% or 6000 Units	100% or 10000 Units
Variable Expenses /Cost -
Direct Material	₹10000	₹12000	₹20000
Total Fixed Expenses /Cost	₹10000	₹12000	₹20000

Note -

If direct material at 50% capacity = ₹10000

therefore 60% capacity = ₹10000 × 60 ÷ 50 = ₹12000.

If direct material at 50% capacity = ₹10000

therefore 100% capacity = ₹10000 × 100 ÷ 50 = ₹20000.