FUNDAMENTALS OF BUDGETS AND BUDGETARY CONTROL

Course Objectives:
To understand and discuss how budgets fit within an organizational context. The course is designed to help understand the budget itself, how it can be managed, and the various tools, for example spreadsheets, that can be used in the budgeting process. The course also aims at equipping students who intend to major in management at four-year universities with strong foundation in Budgets and Budgetary Controls.

Course Description :
This course provides a fundamental understanding of budgeting, budgeting process and the control system. It includes a practical guide for preparing financial budgets. It covers the basics of sources of revenue, revenue and expense forecasts, the cash budget, operating budgets, capital budgeting, internal control system, and uses of budgets as a control mechanism in governmental units and business organizations

Course Outline:
1. Overview of budgeting

• The basic concepts of budget and budgeting
• Budgeting and forecasting
• Budgeting and management
• Budgeting and planning
• Budget procedures and budget administration

2. Types of budgets

• The components of operating budget like sales budget, production budget, production cost budget, ending inventory budget, cost of goods sold budget, selling expenses budget, administrative expenses budget and budgeted income statement
• The components of financial budget like capital expenditure budget, cash budget, budgeted balance sheet, and cash flow budget

3. Approaches to budgeting

• The various approaches to building budgets like-fixed budgeting approach, flexible budgeting approach, incremental budgeting approach, kaizen budgeting approach, zero base budgeting approach and others.
• The distinctive features of each approach to budgeting.

4. Preparing a budget

• The preparation of operating budgets
• The preparation of financial budgets

5. Budgetary control

• The basic concepts of budgetary control
• The process of budgetary control

Learning Outcomes:
By the end of this course, the student will be able to:

1. Describe Budgeting as a Planning and Control activity
2. Differentiate between different types of budgets
3. Understand different approaches to budgeting
4. Identify the objectives of budgeting as a financial management tool.
5. Apply the concept of internal control by the preparation and interpretation of budgets.
6. Explain what is meant by Zero-based Budgeting and demonstrate the ability to prepare budgets from given data using the technique
7. Understand the nature and purpose of budgetary control

Skills to be developed:
This course helps students in developing the following skills:
1. Communication (Oral & written) Through Assignments, Case Study discussions and
Examinations
2. Analytical Through Case studies and examinations
3. Team Work Through Case studies
4. Creative Thinking Through Case studies, assignments, classroom
discussions
5. Adaptability to Change Through Case studies, and examinations
6. Ethics Through lectures and assignments
7. Use of Information Technology Through use of PCs, Internet, CD-ROM, Statistical
data base in the library
8. International issues Through Case studies, assignments, classroom
discussions, and examinations

Evaluating Student Performance:
Class participation and attendance 10%

Individual assignments 20%
Mid-term examination 20%
Final Exam 50%

Grading:
Percentage Score Letter Grade GPA Points Percentage Score Letter Grade GPA Points

90 – 100 A 4.0 70 - 74 C 2.0
85 - 89 B+ 3.5 65 - 69 D+ 1.5
80 - 84 B 3.0 60 - 64 D 1.0
75 - 79 C+ 2,5 < 60 F 0.0

Educational Resources:

Course Schedule & Outline:
Sixteen Week Semester, 3 hrs/Wk