Principle Budget Factor | Accounting

A Principle Budget Factor is a factor or an activity which is constraint for business and which is limiting factor. Budgets on other factors are followed by the principle budget factor. Copy the link given below and paste it in new browser window to get more information on Principle Budget Factor:- www.transtutors.com/homework-help/accounting/principle-budget-factor.aspx

1. Principal Budget Factor

2. What is budget Budget is quantitative future plan of an enterprise that it aims to achieve for a defined period A financial & other goal of enterprise What is budgeting Budgeting is coordinating the combined intelligence of an entire organisation into a plan of action based on past performance and governed by rational judgments of factors that will influence the course of business in the future

3. What is principal budget factor? A key factor or limiting factor which limits the activity at certain level For organisation following may be constraints or limiting factors Raw material short supply Non availability of skilled labours Government restrictions Lower demand of product Shortage of power Shortage of Machine hours Shortage of finance

4. Types of Budget

5. What is budgetary control? Budgetary control is the establishment of budgets relating to the responsibilities of executives of a policy and the continuous comparison of the actual with the budgeted results, either to secure by individual action the objective of the policy or to provide a basis for its revision

6. Objectives of budgetary control Providing target and overall aim of organisation Determine responsibility of executives Providing basis for comparison of actual results Ensuring optimum utilisation of resources Providing basis for revision or corrective measures Advantages of budgetary control Reduce the cost & overheads Helps in planning & formulating various policies Maximise the profit and production through optimum use of resources Facilitates corrective actions in case of inefficiency

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