3.9 Budgets

Objective notes

4 learning objectives

3.9.1(HL)—Cost and profit centres

• Distinguish cost centres and profit centres

• Analyse roles of cost and profit centres

• Centres support accountability, control, budgeting, and performance monitoring

3.9.2(HL)—Constructing budgets

• Construct a budget

• Budgets plan expected revenue, costs, cash flows, and resource use

3.9.3(HL)—Variances

• Calculate and interpret variances

• Variances compare budgeted figures with actual outcomes

3.9.4(HL)—Budgets in decision-making

• Analyse the importance of budgets and variances in decision-making

• Budgets guide planning, control, accountability, motivation, and corrective action