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Unit 9: Budgetary Control

regularly between the actual expenditure and the budgeted allowances, and the results Notes
reported to the management. For this purpose, budget reports showing the comparison
between the actual and budgeted expenditure should be presented periodically and promptly.
The reports should be prepared in such a manner that they reveal the responsibility of a
department or an executive and give full reasons for the variances so that proper corrective
action may be taken. The variations from budgets are worked out in respect of each items of
expenses so as to locate the responsibility and facilitate corrective action.
A specimen budget report for expenses is given below:
BUDGET REPORT
Department ................................... Period ...................................

Expense Budgeted Actual Differences Decrease Cumulative Reasons
Increase variance
Controllable Repairs Mach.
Maintenance Elect.
A.
Maintenance Power
Lighting Lubrication, etc.
Non-controllable Expense
Floor space General
B.
Prorated
Total
Date of preparation ………………………………….. Copies to:
Prepared by ………………………………….. 1 …………………………………..
Checked by ………………………………….. 2 …………………………………..
Submitted by ………………………………….. 3 …………………………………..

9.4 Classification of Budgets

The following figure explains the classification of budget:

Figure 9.3

Budgets

Functions Flexibility Time

Sales Budget Fixed Budget Long-term

Production Budget Flexible Budget Medium-term

Material Budget Short-term

Labour Budget

Manufacturing overhead budget

Selling overheads budget

Cash budget

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