Question

How is budgeting used as a tool for the manager?

What type of budget are you prepared to develop?

Read Skills 8 & 9 pages 179-224

Textbook: Becoming an Effective Health Care Manager: The Essential Skills of Leadership by Len Sperry 2003

ISBN-1-878812-86-6

Answer 1

Answer:

Question # 1. Budgeting is very important planning as well monitoring tool for the managers.

Budgeting helps us in planning the project and estimate their expected return. The budgetary guidelines help us in setting up the right expectation in terms of revenue as well as the timeline of the achievement of the activities. Budgeting also helps in controlling and measuring the performance as we can track the progress of the project or the activity against the budget. Another important use of the budget is to properly and efficiently allocate the resources among different activities that take place in the organizations. For the members working on a specific task of project work, the budget gives them the direction as to how much resources can be deployed and how much return is expected, therefore for the team also budget helps in controlling and monitoring the project finances.

Question # 2. Types of budgets:

There are various types of budget such as sales budget, capital budget, expense budget, production or revenue budget, labor, or resource budgets we prepare during the business operation. There is a different approach we can take while building or creating the budget for these areas of budgeting. These approaches to budgeting are incremental budgeting, activity-based budgeting, target-based budgeting, or zero-based budgeting. The approach would depend on the kind of work and business environment where the budget is being used for.