Reference no: EM132130354

Budgets and Managerial Responsibility

This module explores budgets and the benefits of creating budgets. In recent years, many organizations faced one of the hardest economic conditions with the recession. Many organizations were not prepared for this and did not have the budgets in place to withstand such devastating times. Budgets are a key financial tool for all organizations. What was once a task that was done on paper and around a large table can now be automated with computer-based financial planning technology. Managers have the technology and the ability to create real-time budgets that "make sense" for the organization and can be revised when needed.

Managers have the responsibility to create a budget in order to communicate the direction and goals for the different organizations and explore how each department is a key element of the overall organizations. Budgets also aid in judging performance by measuring financial results against planned objectives. Finally, budgets can be used a motivating factor for departments to meet the stated budget.

Module Outcomes: A, B, C, & D

Required Readings/Resources: Read Chapters 11 & 12 in Datar and Raj an Power points 11 & 12

Videos

- Flexible Budgeting

This video explains the concept of Flexible Budgeting in Managerial Accounting. A comprehensive example is provided to demonstrate how a flexible budget is created, and intuition is provided as to why a flexible budget is needed when the actual activity level differs from the budgeted activity level.

- The Importance and Use of Budgets Within an Organization

An overview of the importance and use of budgets within an organization

Discussion

"Strategy, plans, and budgets are unrelated to one another." Do you agree? Explain.

Explain how the manager's choice of the type of responsibility center (cost, revenue, profit, or investment) affects the behavior of other employees.

Refer to the MBA Discussions power point presentation for tips on how to gain maximum learning and points from your discussion engagement

Attachment:- Budgets and Managerial Responsibility.rar