Tribhuvan University
Faculty of Management
Office of the Dean
Bachelor of Business Management (BBM)
Course Description
:This course contents an introduction to budget, zero base and activity based budgeting. Master budget, flexible budget and variance have been incorporated along with standard costing and financial forecasting.
Course Objective
:This course provides an introduction to preparation of different types of budgets and associated with general financial forecasting techniques which will help students to understand the budgeting process and forecasting techniques in practice. Course Description This course contents an introduction to budget, zero base and activity based budgeting. Master budget, flexible budget and variance have been incorporated along with standard costing and financial forecasting.
Course Contents:
Lecture hours show the approximate classroom time allocated to each unit.
Unit 1. Introduction to Budget
- Budgeting: Concept, importance, role and users of a b udget, eight steps for creating a b udget, Methods for preparing budgets, budgeting ethics and problem in budgeting, Behavioral aspects of budgeting, budgetary control: Concept, objectives and limitations of budgetary control , Responsibility accounting and the budgeting responsibility centers
Unit 2. Zero Based and Activity Based Budgeting
- Zero Based and Activity Based B udgeting: Meaning, objectives, advantages, limitations and procedures.
Unit 3. Master Budget
- Operating Budget: Meaning and types- Sales budget, Production budget, Direct material Purchase budget, Direct labor budget, Factory overhead budget, Selling and administrative expenses budget, Budgeted Income Statement.
- Financial budget: Meaning and t ypes- Capital expenditure budget, Cash budget, Budgeted
- Balance Sheet and performance report
Unit 4. Flexible Budget and Variance
- Static budget and Flexible budget: Concept and need, Difference between Static and Flexible budget, Meaning of overhead and three overhead variances.
Unit 5. Standard Costing
- Standard costing: Meaning, objectives and limitations, Difference between Standard costing and Budgetary control, Variance Analysis: Direct Material and Labor Variance.
Unit 6. Financial Forecasting
- Financial forecasting: Meaning, objectives, scope and users of financial reporting, Qualitative characteristics of financial information, Regulatory framework (IFRS, NFRS), Ethics in financial reporting, Forecasting in budgeting: Meaning, objectives and importance, Process of financial forecasting, Methods of financial forecasting- Qualitative methods: Executive Options, Delphi Technique, Sales Force Pooling, and Consumer Survey, Quantitative methods: Time series
- Forecasting, Pro-forma financial statements.
Suggested Readings:
Brigham, E. F., & Ehrhardt, M. C. (2013). Financial Management. Cengage Learning India Pvt. Ltd. Kemp, S., & Dunbar, E. (n.d.). Budgeting for Managers. New York: MC Graw- Hill. Upadhyaya, T. P., Gupta , U. P., Khanal, B. R.,et al, (2071BS). Cost & Management Accounting. Kathmandau: Samjhana Publication Pvt. Ltd. Welsch, G. A., Hilton, R. W., & Gordon, P. N. (n.d.). Budgeting Profit Planning and Control. Prentice- Hall of India Pvt. Ltd.