A budget is a plan that people made for their self to show them how much money they can spend to stay within their budget goals. Revenue is the total amount of money that is made over a set amount of time and a change in the budget changes the growth or decline within the company. If the revenue is too high for the budget then the company is not putting out accurate financial information which could lead to budget deficit or a surplus. In the revenue is too low for the budget it shows that a company is not planning properly to meet their end goal and that they are not making proper cut backs on specific things. The reason variances is not better than percentages for revenue is because it is more time consuming when you are trying to get this information to management in a timely manner. The percentage method is a better option because it is not only faster but it helps with making accurate financial predictions.

DISCUSS

Answer rating: 100% (QA)

The provided explanation highlights the importance of budgeting and revenue management within a comp... View the full answer