6 COMPONENTS OF THE BUDGETARY CONTROL SYSTEM AND TYPES OF BUDGETS
The policy of a business for a defined period is represented by the master budget, the details of which are given in a number of individual budgets called functional budgets. These functional budgets are broadly grouped as physical, cost and profit budgets. Physical Budgets Those budgets which contains information in terms of physical units about sales, production etc. for example, the number of sales, quantity of production, inventories and manpower budgets are physical budgets. Cost budgets Budgets which provides cost information in respect of manufacturing, selling, administration etc. for example, manufacturing cost, selling cost, administration cost and research and development cost budgets are cost budgets. Profit budgets Budgets which enables in the ascertainment of profit, for example, sales budget, profit and loss budget, etc. Types of Budget Fixed Budget. Flexible Budget. Master Budget. Functional Budget. Long Term Budget. Short Term Budget. Current Budget. Fixed Budget...