An Evaluation Of Budget And Budgetary Control In A Manufacturing Company (A Case Study Of Global Soap And Detergent Industry Limited Ilorin, Kwara State)
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Study Level: BTech, BSc, BEng, BA, HND, ND or NCE
1.1 GENERAL INTRODUCTION
It is civilized study it is a generally accepted more that main tools of modern management is budget. Jesses Burke (1999) he is head of Maxwell graduate school of citizenship and public affair in Syracuse university write on the evaluation of modern budgeting. In his opinion he stated that originally budget were seen as a modern management tool which spread as a public prose for the revenue and expenditure of the economic. With the advent of modern budgeting the private organization budgeting goes beyond that. Budgets are also used to predict expenses and cost must be analyzed to determine the feasibility of the system employed. Budget has comprehensive outlines of the organization formulate its goals and objectives to be achieved during the year under preview. It establishes priorities for the use of scarce resource identify policies and operational modalities to implement programmers and project efficiency and provides a basis for an equalization of resources.
Hence, one would conclude that budget in nay organization are central tools for organization development, budgeting requires explicit attention to targets and co-ordination of the results. This is result of public interest, which generally generated by corporate and individual organization. They are characteristic by measure budget deficit, considerable uncertainly as to an actual result and day to day management crises.
Most of the policies on the budget remain operational when resources f their achievement are allocated. Budgets are the main measure by which essential resources of men and materials are allocated for the accomplishment of almost all the goals of those who under them.
Budget should be provided for every development and every aspect of operation, administration, selling and manufacturing all of which from the basis on which on organization exists.
Budgeting procedures must be set up, whereby predetermined cost can be obtained rather having this information available only after the accounting period. Effective budget proved detailed reports of completer costs regarding operations of the enterprise for the purpose of comparing such data with other period of operation and with other concern of the organization and for the analysis of the nature of any various that occurs.
No selling price can be determined without taking into consideration in any estimating for over heads. The grater diversification of the products the more important it is for the manufacturing to have an accurate assignment of the overheads cost of the enterprise to each product manufacturing. The compilation of all the data regarding the actual cost as compared system so that it can be something built into the cost to advance aid management in funding enterprises to greater profitable period.
The size and complexity of the business necessities breaking down the budgeting period into short range and long range budgeting period. Short range cover period of one year or short and budget of sales, over heads and cash etc are prepared during the period. A review of the budgets carried out from time to time range compared actual figures with budgeted figures. If the budgets are fund to be out of line they will have to be adjusted for future period. The key is constant review up dating of the budgets. The long range budgets on the other hands, cover generalities are not as detailed and specific as short range budget for example the budgeter is more interest in the general projected increase in sales volume. Stemming from the projector sales volume would be capital improvements. This would give management an idea of what now types of equipment new plant etc the company should be planning on acquiring. The budget being a fools of management should be flexible to give room for updating from time to time. Management must be ready to meet actual demands and changes not withstanding the budgets.
An important consideration in the preparation of the budgets is that management should not set unrealistic and unattainable goals. The more the goals are realistically set, the more the budgets will be an aid in establishing efficiency and answering maximum profit.
1.2 STATEMENT OF THE STUDY
The research is intend to form an idea of the amount or value of budget and budgetary in manufacturing company and the problem that may means in commotion with the budgeting and budgetary control in an organization. Those are the following areas the research will more across.
The problem facing budgetary process, since the budget comprising the individual department and functional budget and master budget.
It will reveal the problem leading to poor co-ordination and communication in global industry limited in the areas of budgeting and budgetary. Control in the global soap aid detergent industry.
The research work will the look in to the problem of budget development in the organization structure, which may be not being appropriate line with current guideline.
The problem which may tend to bad handling of budgetary system with undue pressure or lack of regard to behavioral factors which may course antagonizing and may lower moral.
Problem of implication in the existence of well document plans may cause lack of flexibility adapting to changing.
1.3 OBJECTIVE OF THE STUDY
In most organization of any size whether public or private, budget and budgetary control can be round in varying degree or complexity and coverage budgeting and budgetary control are planning and co-odinatings the activities of an organization to assist management in achieving desired objective of the organization. In manufacturing industry consumers habits taste and attitude change over time and his has been happening in Nigeria economic since the advert of the structural adjustment programmed (SAP) which poses challenges for the manufacturing. As a result or this organization involved in the process or manufacturing needs to revised their minatory control system and make some adjustment to keep production proving in order level required to keep production growing in order to satisfy consumer.
Thus, this project will examine the human behavioral aspect budgeting discus the objectives of budgeting and budgetary control as well as he benefit to be organization. Emphasis will be laid on the constraints facing organization when they carryout budgeting or take part in the budgeting process.
They major objective through is to focus on current budget practices and budgeting control in a small organization using global soap and detergent industries as a case study and to make use of the budget as an instrument in planning and co-ordination the activities and controlling each functions of its business for attainment of set goats. This project will as also aim at showing effective budgeting and focus on some neglected area such as:-
The identification of the procedure for the formulation of budget preparation and evaluation of budget and the necessary mechanism usually set in motion in the process of implementing the budgeting control system.
The recognition of the roles played and benefit acquiring him from budgetary. Control as well as the practical problems and limitations of budgetary control
SIGNIFICANCE OF THE STUDY
The importance of budget to and organization or enterprises can not be over-emphasized. The small enterprises can not over look the importance of budgets as an annuities for long large corporation or conglomerates these small business are the opinion that and this should not be the case Admitted they are hampers be some constraints and these presents may from affectivity and efficiently carryout their duties as regards budgeting.
The study will critically analyze those be faced by small business in the process or budgeting control the factors mutating against the affectivity budgeting control process and the preparation and implantation of those budgets are also some of the factors to be consider in this research, the importance and reason for the process of budgeting and recommendations to the organization who want to embark an budgetary control process but can not because of one reason or the other and for those already implementing it but are still facing are problems or the other, these recommendation can still be or use to them.
1.4 SCOPE AND LIMITATION OF THE STUDY
The project is expected to cover the various concept and principle guiding budgeting and budgetary control system in global soap and detergent industrial limited.
The application of those concept and principles by the company under will be attempt. This well gives us an opportunity to see whom practical budgeting and budgetary control in an organization and recommendations will be made at the end the encourage others organizations who are not yet employing budget and budgetary control to do so.
The problem limitation, constant and implements to this projects work are numerous and some of them are as follows.
There is not enough time for the writing of this project work because or the work are right so spend some months in order to gather all the necessary information or materials needed nut rather just a litter period or time is being, so this does not give room for the proper and clear information in about the urgent of this project.
More over, financial constraints deprived the research ability to visit many companies be ought to visit in gather all the data needed different small scale industries so all this work will not just proved irrelevant at the end of completion of research. Another problem is the secrecy being attached to the information by the company. The has consequent adverse affect on the realization of information and data needed for the study. The company may not want to disclose the secret that wants to get his information about the project will be involved.
1.7 ORGANIZATION AND PLAN OF THE STUDY
The repent have been arrange from chapter one background of the study, significant of the study, scope and limitation of the study, and organization and plan of the study.
Chapter two form, revenue of relevant literature, what is a budget, what is mean by budgetary control? Types of budgeting the procedures of budgetary control and behavioral Aspects of budgetary system and references.
Chapter three make up methodology of the study limitation and constraints of research.
Chapter four and consist of origin and growth of global industries preparation and information of budgets and budgeting control process in Global Industries organization and implementation of budget in global industries limited, evaluation and revision of budget procedure at the company hierarchy of management and their roles in budgetary preparation in global industries limited and constraint to budget and budgetary control at the global industrial limited. Finally chapter five is made up of summary conclusion., recommendation and bibliography.
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