Home › CA Inter › Cost and Management Accounting › Budgets and Budgetary Control › Budgetary control compares actual results against
Budgetary control compares actual results against
Athe previous year's actual figures
Bthe industry average for the sector
Cthe auditor's recommended figures
Dthe budgeted figures for the same period
Answer & Solution
Correct answer: D. the budgeted figures for the same period
1. A budget is a plan expressed in figures, set before the period begins.
2. Budgetary control is the process of comparing actual results with that plan.
3. The differences are the variances, and they point to where action is needed.
4. Comparing against last year's actuals measures drift, not performance against plan.
_Source: ICAI Cost and Management Accounting Ch15 'Budgets and Budgetary Control', section 15.5_
Related questions
Under a fixed budget, comparing actual cost at a different activity level is misleading beA cash budget is primarily concerned withZero based budgeting differs from traditional budgeting because itThe budget that consolidates all functional budgets into a single statement is theA forecast of the output planned for the budget period is theA flexible budget is more useful for control because itA budget prepared for a single, standard level of activity is a