Ingram Co is a small engineering company. The company does not have a computerized accounting or budgeting system, but rather the chief accountant manually produces a budget each year in conjunction with the senior management team.

The managing director has expressed concern at the time and cost of producing the budget each year, and has asked whether any short cuts could be taken.

Required:

Write a memo to the managing director which:

(a) explains the objectives of budgetary planning and control systems;

(b) identifies and explains the stages involved in the preparation of budgets;

(c) identifies ways in which the budget-setting process could be improved for Ingram Co.