Budgeting This paper ex

There are many procedures by which forecasts may be developed. Some, such as subjective opinion forecasts, are not suitable for use in modern corporate organization budgeting applications. A somewhat more sophisticated forecasting procedure is the index-based forecast. Unfortunately, such forecasts are as good or as bad as the index that serves as its foundation and the degree of correlation between the actual demand and the forecast based on the index. Thus, a large volume of highly reliable data must be available if a valid and reliable index is to be constructed. A very high correlation (in the range of 90 percent) is required between sets of data used in the construction of indexes to be used for forecasting. This high correlation requirement is a major disadvantage associated with index-based forecasting of demand (Evans, 2002).

The best forecasts are those developed

. . .
(Evans, 2002). A performance budget is, like the objects of expenditure budget, an incremental budget. A performance budget, in contrast to the objects of expenditures budget, emphasizes the functions of the organization. It is these functions that are budgeted, as opposed to the items required to perform the functions, as is done in an objects of expenditure budget format. The functions of an organization are tied directly to its missions and objectives (Evans, 2002). The advantage of the program budget format is that it places costs on functions. People are able to see exactly what it costs to have a specific function performed by the organization. The performance budget format provides both supporters and opponents of specific organizational functions with ammunition to either defend or oppose the performance of the function by an organization. The disadvantage of this budget format is that it makes no effort to state how specific functions will be carried out ù just that they will be performed. This disadvantage makes it somewhat difficult to assess performance budgets in some instances, although they are easier to evaluate than are objects of expenditure budgets (Jensen, 2001). From the organizational manager's pe
. . .

Some common words found in the essay are:
Jalbert Chan, Austin Cheek, PROCESS BUDGETING, budget format, Financial Management, evans 2002, Publishers Gitman, budgeting process, Hong Kong, objects expenditure, Publications Evans, November Corporate, capital budgeting, Business Cambridge, performance budget, program budget, program budget format, performance budgets, expenditure budget, financial resources, objects expenditure budget, performance budget format, September Analyzing, cyclic demand projections, projections cyclic demand,
Approximate Word count = 1720
Approximate Pages = 7 (250 words per page)

More Essays on Budgeting This paper ex