Finance Unit - Budgets

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A2 Business studies Mind Map on Finance Unit - Budgets, created by jack.miers on 01/04/2014.
jack.miers
Mind Map by jack.miers, updated more than 1 year ago
jack.miers
Created by jack.miers over 10 years ago
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Resource summary

Finance Unit - Budgets
  1. DEF: A budget is a financial plan that sets targets based on projected costs and revenues
    1. Types of Budgets
      1. Income budget
        1. expenditure budget
          1. profit budget
          2. BENEFITS of using budgets:
            1. - can measure performance
              1. - can improve motivation
                1. -progress monitoring
            2. DRAWBACKS of using budgets:
              1. - new business's lack experiance in setting realistic budgets
                1. Costs are volatile and can change quickly
              2. Variance analysis-
                1. Favourable variance
                  1. Actual costs are lower than budgeted figures
                    1. Adverse variance
                      1. costs are more than budgeted
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