Budget Planning and Putting Learning into Practice Assignment

Budget Planning and Putting Learning into Practice - Assignment Example Being significantly under or over budget means that there are significant changes in some factors that were not foreseen or anticipated at the time these budgets were made. The information therefore does not necessarily mean that the organization need to come in exactly as planned because at the onset, it is understood that these are just benchmarks for planned performance. As emphasized, â€Å"preoccupation with the dollars and cents in the budget, or being rigid and inflexible, is usually counterproductive† (Garrison, Noreen, & Brewer, 2009, p. 383). For example, if the budget for sales for the year 2013 was stated as $5,000,000; significantly under budget means arriving at actual sales figure of just $2,000,000 and the organization should verify the causes of this variance. Applying what one learned from the theories and concepts of managerial accounting would assist in making one more productive in the work place through the provision of direction and guidance in principles and techniques that have been tested to be the best practices through time. As emphasized, managerial accounting assists managers through the performance of three vital activities: planning, controlling, and decision making (Garrison, Noreen, & Brewer, 2009). Through strategies and techniques in undertaking these relevant functions, managers are able to make responsible and effective decisions after the use of analytical decision-making tools, which are learned through managerial accounting. For example, in learning the concepts on planning, the manager would be made aware of taking into account purchasing for raw materials, where the costs of which are projected to increase by as much as 30% for the coming year. Therefore, through planning, the manager could purchase appropriate volumes of these raw materials to avail of its low prices before the new and increased price would be implemented. In doing so, revenues and profits are maximized as costs are