Budgeting

What this unit covers

The resources follow the budgeting cycle. The mind map Master Budgeting CH8 defines a budget as a detailed plan for the future, usually in formal quantitative terms, and explains the perpetual budget, a 12-month budget that keeps rolling forward by a month or a quarter. Other maps look at Activity Based Budgeting, which starts from results and the activities behind them, and at top down versus bottom up budgeting.

Where to start

Begin with the overview maps. Master Budgeting CH8 gives you the vocabulary. Advantages and disadvantages of Budgeting and USING BUDGETS explain why organisations budget, covering coordination between departments, forward thinking, motivation and accountability.

Then move to the flashcards. The deck Chapter 8 key terms covers the cash budget, direct labour budget, direct materials budget, manufacturing overhead budget and merchandise purchases budget.

Practice with numbers

The notes titled Exercises work through a sales budget, budgeted production units and a direct materials purchases budget, starting from a lawn chair company's monthly unit sales. Try them after the maps, so the steps already feel familiar.

Using quizzes and maps together

Take the Chapter 8 quiz first and note what you miss. Go back to the matching map, such as Variances, which explains the gap between actual and budget figures and the difference between favourable and adverse results. Then retake the quiz. The Monitoring & controlling performance with budgets quiz is a good next step once you reach control and variances.

Where it sits

Budgeting belongs to the Cost and Management Accounting strand of Accounting and auditing. Many of the resources are written for university courses, and a smaller share suits school students.

Choose one map, take one quiz, and then make your own flashcards for the terms you found hardest.