Research Paper on:
Budgeting

Unformatted Sample Text from the Research Paper:
previous years. The Institute of Cost Management Accountants describe a budget thus; "A financial and or/quantitative statement prepared prior to a defined period of time, of the policy to be  pursued during that period for the purpose of attaining a given objective. It may include income, expenditure and the employment of capital" (Chadwick, 2003). Therefore, we can see it is  a predetermined plan that is used to determine the way a business uses its resources. It should be noted that this relates to financial resources, but can also relate to  non financial resources. The use of forecasting can be undertaken with previous sales figures as well as adaptations and changes as the  result of known factors that will impact on demand for example, the firm will know what impact changes in the economy may have in the demand and the impact that  advertising will have. There will also need to be adaptation made for the costs that are changing and are known, such as changing fuel prices. Therefore, the use of forecasting  is a starting point, with the forecasts adaptation according to the environment. The budget is usually managed from the top down, as  it relies in the forecasts that are made which then generates the budgets. There are opportunities for management to have an input, applying for more funds for a specific project.  There is also input in terms of feedback. When budgets are distributed feedback can be gathered where managers will make any points necessary and may argue for changes in their  budgets, these will then be considered and any changes that are deemed necessary or advisable will be made. The budget process and tools are based on activity based costing methods.