Consumer Behavior Utility In this section, we are going to take a closer look at what is behind the demand curve and the behavior of consumers.
Key terms There are two types of control, namely budgetary and financial. This chapter concentrates on budgetary control only. This is because financial control was covered in detail in chapters one and two. Chapter objectives This chapter is intended to provide: Structure of the chapter Of all business activities, budgeting is one of the most important and, therefore, requires detailed attention.
The chapter looks at the concept of responsibility centres, and the advantages and disadvantages of budgetary control. It then goes on to look at the detail of budget construction and the use to which budgets can be put.
Like all management tools, the chapter highlights the need for detailed information, if the technique is to be used to its fullest advantage.
Budgetary control methods a Budget: An example would be an advertising budget or sales force budget. Budgetary control and responsibility centres; These enable managers to monitor organisational functions. A responsibility centre can be defined as any functional unit headed by a manager who is responsible for the activities of that unit.
There are four types of responsibility centres: Inter-departmental sales are often made using "transfer prices". Advantages of budgeting and budgetary control There are a number of advantages to budgeting and budgetary control: Forces management to look ahead, to set out detailed plans for achieving the targets for each department, operation and ideally each manager, to anticipate and give the organisation purpose and direction.
Requires managers of budget centres to be made responsible for the achievement of budget targets for the operations under their personal control.
A budget is basically a yardstick against which actual performance is measured and assessed. Control is provided by comparisons of actual results against budget plan.
Departures from budget can then be investigated and the reasons for the differences can be divided into controllable and non-controllable factors. Problems in budgeting Whilst budgets may be an essential part of any marketing activity they do have a number of disadvantages, particularly in perception terms.
This is often coupled with "empire building" in order to enhance the prestige of a department. Responsibility versus controlling, i. Characteristics of a budget A good budget is characterised by the following: Budget organisation and administration: In organising and administering a budget system the following characteristics may apply: Units responsible for the preparation of budgets.
A budget centre may encompass several cost centres. This may consist of senior members of the organisation, e. Every part of the organisation should be represented on the committee, so there should be a representative from sales, production, marketing and so on.
Functions of the budget committee include: Controls the budget administration The job involves:A budget constraint represents all the combinations of goods and services that a consumer may purchase given current prices within his or her given income. Consumer theory uses the concepts of a budget constraint and a preference map to analyze consumer choices.
The OBR’s Spring Budget forecast for the level of GDP at the end of is broadly unchanged from Autumn Statement , although the expected profile of growth has been revised. It then goes on to look at the detail of budget construction and the use to which budgets can be put.
Like all management tools, the chapter highlights the need for detailed information, if the technique is to be used to its fullest advantage. · after sales service · purchase of stocks. The Spring Budget also marks the transition to a single fiscal event each year, an autumn Budget.
timing effects and other one-off factors significantly reduce borrowing in , the medium. The capital budget should have a direct link to the multi-year capital improvement plan. The multi-year capital plan should identify needs, determine financial impacts, prioritize, and include a .
A capital budget contains long-term spending for the acquisition of assets and the means to pay for them, including borrowing. 1 This guide will examine operating, or annual, budgets.