1. Identify and explore YOUR future profession accounting.
2. Produce a critical review of your understanding of what it means to ‘become a professional’ in YOUR future profession.
This study work is based on the investigation on the utilization of budgeting as a tool for planning and control in the manufacturing business such as Anambra motor manufacturing organization (ANAMMCO LTD). The purpose of the study would be to recognize the significance of budgeting since an instrument for planning and control to the procedures of the manufacturing industry which the task optimizes as the process objectives. The study research additionally is designed to identify on the procedures adopted in the formulation of the annual budgets of ANAMMCO LTD. Depending on these element the premise for the research are as follows. The managers use budgeting as an instrument for planning along with control in achieving the goals of the organization. Next, in the manufacturing industry decision making is conducted using budgeting. Finally, the utilization of the resources is accomplished with the aid of the budgeting and budgetary control. It was discovered following the investigation that organization uses budgeting in the achievement of their goals and objectives. The main objectives of the firms are inareimization of the profits and the efficiency as well as effectiveness of the organization operations is usually enhanced through the use of the budgeting.
The business organization usually need to plan to achieve each their goals as well as objectives. Having a thorough preparing in every company cannot be accomplished without requiring appropriate budgeting. The facet of integrating on the resources and tasks for the objective attainment is paramount function of the management of each of the firm and one of the useful equipment intended to attain these planning (Aarabi & Hasanian, 2014). The principle essential of planning involves the choice of the organization and the departmental goals along with the determination of the means to attain them. The budgeting relates to making of the plans and monitoring activities to be able to determine on whether or not they adapt to the plans. The idea of budgeting entails dexterity and the control. The manufacturing enterprises they could solely achieve the profit maximization by appropriately planning on the use of the obtainable resources. This might be accomplished when several activities are effectively coordinated and the decision taking in the business are result oriented (Adrodegari, Bacchetti, Pinto, Pirola & Zanardini, 2015). The method of setting on the objectives and the objectives to be achieved in the foreseeable future time and deciding on the goals to be exercised is thought to be planning. The technique of translating with this planning to be financial target is really what is widely seen as short-term tactical planning.
Budgeting is amongst the methods wherein the manufacturing organizations control the costs. Cost control lead to looking at of the resources of a firm in order to attain on the major goals of profitability, consequently it might be regarded to as cost management (Bryman & Bell, 2015). To ensure that the expenses to be affordable, it is vital that you compare the costs against the industry benchmark which is an excellent indicator for the competitive standing. The business organization usually strive to achieve good result on their activities and make use of the budgets. The budgetary control includes the preparations of the budgets, coordination of the actual performance into the budget and to achieve maximum profitability (Bryman & Bell, 2015). The research aims to find out the budgetary process that is used in the achievement of the goals. Moreover, it aims to determine on the controls which are applied in the cost reduction as well as comparison between the planned and the actual performance (Aarabi & Hasanian, 2014). The organization which the study has focused is Anambra motor manufacturing company.
The management of any specific group possesses the main part of attaining the objective of profit maximization (Collis & Hussey, 2013). The objective of profit maximization is normally hindered throughout the period of the economic depression that capabilities on the low capability utilization, the exorbitant interest rate and shortage for the foreign exchange in buying of the raw materials Collis & Hussey, 2013). The study is meant to assist in the determination and emphasizing on the issue that mitigate against the use of utilization on the budgeting as a tool for planning and control in manufacturing industry.
The budgeting, planning, and the control are the primary components for the successful management in the manufacturing industry. The objectives of the research are;
To find the significance of the budgeting as tool for planning and control in the operations of a manufacturing industry that optimizes of the profit.
2. To recognize on the methods which are implemented in the formulation and implementation of the annual budget.
3. To find out whether there is an association in regards to the kind of budget implemented and also their actual performance.
4. To ascertain whether the budgetary control as the management tool might contribute on the enhancement of the managerial efficiency and high productivity.
In the world of business, the main objective is maximize on the profit by providing on the good and the services at a fair, competitive as well as affordable price (Stevenson & Sum, 2002). The aim of the study is significant because of determining on whether budgeting is a tool for planning and control, ascertain on the role towards ensuring of the profitability and efficient rendering of the goods and services.
A budget is referred to as the manual quantified in regards to monetary terms, which is prepared as well as approved prior to the defined period showing a planned income to be generated (Walther & Skousen, 2014). The budget control entails the establishment of the budgets that relates to the responsibilities of the top management to the requirement of the policy and the continuous comparison to the actual budgets results.
All the organization in respective whether economic, political and the social make plans for the future. An organization that does not have a plan is uncoordinated on their objectives and goals (Shobrys & White, 2002). The budget could be regarded as the program of predominant to the people in the organization that is stated with regards to the monetary terms and susceptible to the constraints made by the other individuals and environment.
Based on Horngren (2000) budgeting places planning to in which is assigned to the fore front of the mind of the managers. It is attention directive since it assist the managers to concentrate on the operating or perhaps the financial issue early on adequate for effective planning (Petit, 2012).
The budgetary control elements involves the predetermined plan, in relation to the financial terms to handle on all the stages of the activities of the business in this kind of a means that the expected profit is near as is possible to be realized (Petit, 2012). The budgeting is important process for the control and the planning. A budget that is well prepared provides the management with a planned program, which is based on the investigation, research and study on the part of the entire organization.
Charles describes the budget as the expression of the plan of action and the aid for the coordination and the implementation. The budget could be formulated for the business as a whole. It is a comprehensive and coordinated plan which can be expressed on the financial terms. According to Lucey, a budget has a number of benefits such as the systematic monitoring and the reporting of the activities helps the control of the current operations. The budgetary process is a significant process which is a significant way for the communication and coordination each vertically and horizontally (Kerzner, 2013). Furthermore, the integration of the budget tends to make achievable much better cash and the functioning capital management.
According to McLaney and Atrill ( 1999 ) emphasizes that the worth of the budget as a strategy of what exactly is to occur and as the regular against which real efficiency is going to be measured , mostly depends on the precisely how skilfully this perform is negotiated (Lavia López & Hiebl, 2014). Rockness (1977), shown that the difficult budgets, existence of a foreseeable incentive structure, and some formal opinions on outcomes resulted to a better performance and a higher amount of the satisfaction of the employees.
The budgetary control process could be utilized to create and sustain the competitive edge. The budget usually signify the numbers and benchmark against the performance. The facet of competitive benefit is focused on comprehending on the things you plan to attain to differentiate yourself, gain available share and entrust the competitors in the dust.
The planning is usually recognized as the management function. According to Fyol, to manage entails forecast and plan, organizing, and to coordinate as well as control (Onduso, 2013). Managing is an operational process that was initially described by analyzing on the managerial functions (Kerzner, 2013). The operations such as manufacturing, accounting and purchasing could differ from one organization to another but the management functions are all the same. The act of planning could be regarded as futuristic and it is done in order to decide what has to be done and to what end (Wagner, Ullrich & Transchel, 2014). When the managers talk about the corporate planning he is referring to the comprehensive business process that could involve many of the activities of planning.
The planning and controlling are the fundamental parts of the process of management. The managers’ device future courses of the actions through planning. The managers need to make the definite steps in order to keep things in the right direction (Griffin, 2013). This is the function of control in order to complement planning by introducing on the corrective actions as plans are being implemented. Fayol in his view highlighted that control describe whether the activities occurs in the conformity with the plans which are adopted and the principles which are established (Aslan, Stevenson & Hendry, 2012). The control of the operation are established through standards, and it compares to the actual performance to these standards and the correct deviations from the standards.
The preparation of the budget requires the joint effort for all the executives that are involved in setting the goals and devising the policies and activating the procedures necessary to implement the goals. A comprehensive budgetary system constitutes principally on the following; the sales budget, production budget, cash budget, capital expenditure budget, pro-forma statement, and the cash budget (Kerzner, 2013). The sales budget is the starting point for the process of budgeting. It is significant in that it is an estimate of the revenue that would be generated by the company from its operation. The production budget is geared towards the sales budget and the inventory policy. The cash budget represent the cash receipts and the payment and the estimated cash balance for each month of the budget period (Walther & Skousen, 2014). You budget could not look like anyone else. The key is finding the best that could work for you. Here are some examples of individuals and couples who have created budget that have work for them. One of the example is for a couple who lived without a credit. Credit could be a normal part of life, but spending more than you could earn contributes to the financial troubles. Steve and Annette Economides have lived without credit since 1982, and they believe their techniques could work for anyone. In interview with US news world report, they explained that the methods they use is that one should shop less often, and shop more frugally. Secondly, is of a young Guys strategy to pay off a debt. Isaac, 24 year old is an IT consultant in DC, lives much comfortably on the moderate salary of sixty thousand dollars annually (Kerzner, 2013). With a budget, he could manage to pay for something toward all his debt, add to the saving and to keep small amount for the occasional cocktail brunch. His goal each month is to pay eight hundred dollars toward the debt, and the others is payment of the bills.
This manufacturing company is a joint venture which exists between the Federal Military Government and the Daimler Benz of the West Germany. The percent of ownership of the two is 60% and 40% respectively. The organization was incorporated as the limited liability company in January 1977 (Shobrys & White, 2002). The company commenced on the operation in 1981 and the installation production capacity in one shift was per annum. The company currently is a development for the long pioneering trading for the Mercedes Benz sales and its now brings Mercedes Benz Technology into Nigeria while at the same time creating employment opportunities. The following diagram highlights the Gantt diagram of the project context.
Figure 1: Gantt diagram of the project context
Conclusion
The budget is considered an efficient tool for the management in the co-ordination of the affair of the business. Nonetheless, to make a budget, an organization ought to know in which it is going. The budget is generally ultramodern in nature, it emphasizes exactly what the business wish to attain in the future. Having a process of the budgetary control enables you to compel the management to look towards the future and use all the strategies that may be accustomed to shape the future. The envisioned statistics should be when compared with the actual contributes to the manner that is definitely timely all through the year to be able to make sure that the management understands the deviations are occurring they are having the restorative measures.
References
Aarabi, M., & Hasanian, S. (2014). Capacity planning and control: a review. Int. Journal of Scientific & Engineering Research, 5(8), 975-984.
Adrodegari, F., Bacchetti, A., Pinto, R., Pirola, F., & Zanardini, M. (2015). Engineer-to-order (ETO) production planning and control: an empirical framework for machinery-building companies. Production Planning & Control, 26(11), 910-932.
Aslan, B., Stevenson, M., & Hendry, L. C. (2012). Enterprise resource planning systems: An assessment of applicability to make-to-order companies. Computers in Industry, 63(7), 692-705.
Bryman, A., & Bell, E. (2015). Business research methods. Oxford University Press, USA.
Collis, J., & Hussey, R. (2013). Business research: A practical guide for undergraduate and postgraduate students. Palgrave macmillan.
Kerzner, H. R. (2013). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.
Griffin, R. W. (2013). Fundamentals of management. Cengage Learning.
Lavia López, O., & Hiebl, M. R. (2014). Management accounting in small and medium-sized enterprises: current knowledge and avenues for further research. Journal of Management Accounting Research, 27(1), 81-119.
Onduso, E. O. (2013). The effect of budgets on financial performance of manufacturing companies in Nairobi County (Doctoral dissertation, University of Nairobi).
Petit, Y. (2012). Project portfolios in dynamic environments: Organizing for uncertainty. International Journal of Project Management, 30(5), 539-553.
Shobrys, D. E., & White, D. C. (2002). Planning, scheduling and control systems: why cannot they work together. Computers & chemical engineering, 26(2), 149-160.
Stevenson, W. J., & Sum, C. C. (2002). Operations management (Vol. 8). New York, NY:McGraw-Hill/Irwin.
Walther, L. M., & Skousen, C. J. (2014). Introduction to Managerial Accounting. Bookboon.
Wagner, S. M., Ullrich, K. K., & Transchel, S. (2014). The game plan for aligning the organization. Business horizons, 57(2), 189-201.
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