Page 1 of 9
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 13
December 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 221
Analysis of Revenue Budgets and Budgetary Control
Policy
Sunitha Devi Vaidya
MBA.
ABSTRACT:
Analyzing the revenue budgets and budgetary control policies of LG ELECTRONICS is presented
in this paper. To study the revenue budgets as it serves as a mechanism through which his
objectives and policies are affected. In the light of the findings can be offered for the improvement
of its budgetary control. The paper provides suggestion for the better and successful budgetary
control. To organize data for the past five years, compare and study the trend possible
I. INTRODUCTION
Need for the Study
The importance of budgeting and budgetary
control in the decision making, revenue budget
estimate of a business needs no emphasis.
Therefore, an analysis of the budgeting and
budgetary control of a business firm is always a
dynamic subject for research and development.
With this back drop a humble attempt is being
made to analyze the budgeting control of LG
ELECTRONICS INDIA LTD.
Scope of the Study
Under this study the budgeting and budgetary
control under study is done from the angles of
efficient controlling and corrective decisions
and operational efficiency.
Methodology
In this case study. The budgeting control of the
LG ELECTRONICS is analyzed in this study.
The required data has been collected from
primary data and such as annual reports were
taken. And reasons for variances were analyzed.
The variances between the revised estimates
and actual were computed. Firstly, the revenue
budget estimates for the past five years were
taken.
Secondly, the variance between the revised
estimates and actual were computed.
Thirdly, the reasons for variances were
analyzed and measures were taken. Graphs are
given regarding variances of sales, total cost of
production, sales quantity and inventory, and
interpretation.
Limitations
The analysis is only based on the information
given in the financial statements of the
organization. The final accounts compared for
the year 2005-06. Data is taken from internal
sources of the company only.
The preparation of a budget under
inflationary conditions and changing
Government policies is really difficult.
Thus, the accurate position of the business
cannot be estimated.
Accuracy in budgeting comes through
expenditure. Hence it should not be relied
on too much in the initial stages.
Budget is only a management tool. It is
not a substitute for management. It
cannot replace management in decision
making.
Budgeting involves a heavy expenditure,
which small concerns cannot afford.
There will be active and passive resistance
to budgetary control as it points out the
efficiency or inefficiency of individuals.
The success of budgetary control depends
upon wiling co-operation and team work.
This is often lacking.
Frequent changes maybe called for in budgets
due to fast changing industrial climate. It may
be difficult for a company to keep pace with
these fast changes, because revision of budgets
is expensive exercise.
Page 2 of 9
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 13
December 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 222
II. ANALYSIS OF BANKING & FINANCIAL SERVICES
COST OF PRODUCTION BUDGET (2006-2007)
INVENTORY BUDGET (2006-2007) (Rs in Lakhs)
PARTPCULARS BE RE ACTUALS VARIANCE
Raw materials 950 906 966 60(adv)
Consumables 600 485 513 28(adv)
Spares 350 273 271 2(fav)
Internally generated 800 1137 1057 80(fav)
Work in progress 3184 3490 2848 642(fav)
Finished goods 10 255 11 244(fav)
Total inventory 5894 6546 5666 880(fav)
PARTICULARS BE RE Actuals Variance %of
Sales 12000 12531 5135 3396(adv) vop
Value of
production
11332 10360 8495 2265(adv)
Cost of production
Raw materials 3665 2582 2558 519(adv) 23.99 30.11
Consumables 630 512 511 107(adv) 4.75 6.01
Power 600 623 719 227(adv) 5.79 8.46
Fuel 562 555 517 78(adv) 5.15 6.08
Repairs &
Maintains
370 335 366 101(adv) 3.10 4.30
Off loading 849 763 1476 847(adv) 7.08 17.37
Total variable cost 6677 5370 6147 1909(adv)
Salaries & Wages 3309 2352 2421 69(adv)
Other expenses 300 369 389 20(adv)
Factory Expenses - - - -
Admin & Selling’s 372 360 378 18(adv)
Depreciation 254 203 130 73(fav)
R&D 125 19 1 18(fav)
Amortization 10 10 21 11(adv)
Interest 25 16 13 3(fav)
Total fixed cost 4370 3329 3353 24(adv)
Total Cost of Prod 11047 8699 9500 801(adv)
Operating profit -78 -250 -193 57(adv)
Capacity
utilization
70% 96% 72% 24%(adv)
Sales quantity
(tones)
2011 1975 1088 887(fav)
Page 3 of 9
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 13
December 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 223
DETAILS OF OTHER EXPENSES (2006-2007)
PARTICULARS BE RE ACTUALS VARIANCE
FACTORY EXP (A)
Water 20.59 21 32 11 (adv)
Rates & Taxes 9.6 10 24 14 (adv)
Insurance 32 32.15 33.08 0.93 (adv)
Amortising Tools 0.4 0.40 0.45 0.5 (adv)
Miscellaneous 9.9 10 10.11 0.11 (adv)
72.49 73.55 99.64 26.09 (adv)
ADMN. EXP (B)
Rent & service charge 84 9 10 1 (Adv)
Postage Telephone &
Telex
29 29 27 2 (fav)
Printing & Stationery 21 21 24 3 (Adv)
Travel Expenses 55 55 46 9 (fav)
Bank charges 20 25 19 6 (fav)
Advertisement 8 8.09 3 5.09 (fav)
Audit Fees 0.91 0.70 0.79 0.09 (adv)
Other Audits 5 0.05 1.10 0.05 (adv)
Legal Exp 1.13 1.67 1.14 0.25 (adv)
Conveyance charges 1.66 - - -
Books & Periodicals 2.7 2.77 3 0.23 (adv)
Membership & seminars
fees etc.
9 10 10.1 0.01 (adv)
Committee meetings &
Entertainment exp
4 5 5.1 0.01 (adv)
Hostel & Guest House 5 4 6 2 (Adv)
Less Income
Consultancy exp 6 6.1 7 1.1 (adv)
Misc 64 16.33 7.56 8.77 (fav)
316.4 193.71 170.79 22.92 (fav)
SELLING EXP (C)
Selling Agency com 3.79 3.79 3.49 0.3 (fav)
Publicity Exp 15 11.31 8.52 2.79 (fav)
Export Promotion Exp 2 0 0 0
Misc 10 16.33 7.56 8.77 (fav)
30.79 31.43 19.57 11.86 (fav)
CHARGED OFF, (D)
WRITTEN OFF&PRO
Mise 94.77 13.69 33.76 20.07 (adv)
Total A+B+C+D 514.45 312.38 323.76 11.38 (adv)
