Product Cost and Budgetary Control Methodologies and Systems Essay

Product Cost and Budgetary Control Methodologies and Systems - Essay ExampleThe reckonary control arrangings controls monetary value through the preparation of budgets, comparing actual functioning with the budget. This every last(predicate)ows the managers to act upon the budget and results in order to attain maximum profitability (FAO, 2010). Over the last twain decades the computer world is changing how companies operate and report. The need to incorporate computerized systems in every business aspects is still ongoing research. Budget information systems and product cost systems are analysed in this report, their benefits and challenges they pose. The product cost and budgetary control methodologies and systems There are two budget control methodologies i.e. the budgets and the budgetary control. The budget is the formal description that represents the projected financial resources that are needed to undertake business activities. Budgetary control on the other hand is a te chnique and a beam that is used by management to match the budget with the actual performance. Any discrepancies are then acted upon either by revising the budget or function control action. The budget information system (BIS) BIS has been in use for the last 25 years having been used for budgetary needs in schools, cities and even countries. BIS integrates all the budget functions into one oneness application. These functions are capital budgets, human resources, operations, performance measures, reports and producing final budget documents. The system provides all the necessary features for maximizing the efficiency of the budget process. BIS is packet that interfaces with the finance, personnel and payroll departments. It then condenses the historical data into database structures. This enhances performance in strategic planning, reporting, document processing, capital planning and improvements. Benefits of BIS The system improves overall performance by enhancing planning pr ocess. The system reduces errors hence planning is made easier and effective. The use of BIS accelerates the speed with which comparison of data is undertaken. It enables accurate tracking of costs in the system. The system quickens the budget preparation process hence few hours are spent in this process. Use of the BIS lowers the number of personnel needed for database management. To implement BIS in an organisation, on that point is need for training the involved staff. This is enhanced through videos materials, online sites, documents that come with the softwares and use of experts. The system can be customized to meet the individualized needs of a community i.e. application process, reports format and document processing. Different computer softwares are used for the BIS depending on the manufacturing company. However aspects of budgeting can be incorporated in one single software or broken down into budget softwares separately, control aspects, comparison parts etc. It is hig hly recommended for the company to incorporate the single application software of BIS. It may be expensive and complicated but with enough training and customer support from the producing company, the system is easy to use. The product cost is defined as the cost of direct labour, direct materials and direct overheads utilized in the production process. These costs are incorporated in the budget process and actual results compare for any variances. The product cost system sets out the process for accounting for the organisations product costs for the purpose of producing information