21. Budgeting and Budgetary Control

Try these first

1. 1.

   What is a budget?

   Hint

   Think of it as a financial roadmap.

2. 2.

   What are the primary objectives of budgeting?

   Hint

   Consider what budgeting aims to achieve.

3. 3.

   What is budgeting?

   • A detailed quantitative plan
   • An informal financial estimate
   • Just expenditures

   Hint

   Recall what a budget serves as in an organization.

4. 4.

   Budgetary control involves comparing which of the following?

   • Actual performance with planned targets
   • Sales with production
   • Resource allocation

   Hint

   Think about how organizations maintain control over finances.

5. 5.

   Your tech startup has a projected sales forecast of ₹10 lakhs, but the actual sales are only ₹7 lakhs. What steps would you take to handle this variance?

   Hint

   Think about why sales might fall short and how you can respond strategically.

6. 6.

   A company follows a strict fixed budget and faces an unexpected increase in raw material costs. Discuss the potential consequences and how they might adapt.

   Hint

   Consider how fixed budgets limit responsiveness to unexpected changes.