BUSS2 - Using Budgets & Variance

Budgets, income budgets, profit budgets, benefits of using budgets, drawbacks of using budgets, what good budgets consist of.

Variance, adverse variance, favourable variance, possible causes of variance, using variance analysis to inform decision making and response.

Issues for evaluation.

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  • Created by: Flo
  • Created on: 04-02-13 22:31
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Buss2 Finance Using Budgets



Budgets: targets for cost or revenue that a firm or department must aim to reach over a given period
of time.

Income budgets: targets set for the amount of revenue (income) to be achieved in a set period of
time

Expenditure budgets: limits set for the…

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Buss2 Finance Using Budgets




Adverse variance: bad for the business as it leads to less profit for the business than expected so
costs are higher or sales are lower than expected
May show inefficiency

Favourable variance: good for the business as it leads to more profit for the business than…

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