You recently attended a workshop on budgeting and overheard the following com- m

Question

You recently attended a workshop on budgeting and overheard the following com- ments as you moved toward the refreshment table. 2. 1. "Budgets look the same regardless of company size and the role the budget process plays in management." 2. "Budgets can include financial or nonfinancial data. At our company we plan the number of hours to be worked and the number of customer contacts we want our sales people to make." 3. "All budgets are complicated. You have to be an expert to prepare one." 4. "Budgets do not need to be highly accurate or very meaningful. No one stays within a budget at our company." Do you agre or disagre with cach comment? Explain.

Explanation / Answer

1. Disagree : Budgets and its processes are not similar when we compare to the size and nature of the company.  

2. Agree: Budgets need financial and non financial data so that the budgets can be built in meaningful way.

3. Disagree : All budgets are not complicated and one need not be an expert. However, an insight of entire operations of the business are needed to prepare budget in more realistic way.

4. Disagree: Budgets need to be accurate as maximum as possible or otherwise budgetory control cannot be exercised and the whole purpose of budgeting will go wasted.

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