Accounting Essay Example

Budget performance report 3

Functions of Budget performance reports

Budget performance reports are useful in showing how the organization’s performance varied from what was budgeted. The variances could either be favorable or unfavorable. As such the management is able to know whether the organisation is performing as expected or not. If unfavorable variances are noted, the management is able to come up with corrective measures so as to bring the organisation back to the right track. As such the organisation is able to set performance targets and put in effort geared towards the achievement of the targets. Where the targets are not met, the organisation is able to take corrective actions so as to ensure that the company performs as expected or even better.

Nola Bateman

Budget performance report

For the month of December 2010

actual financial statement

Budgeted financial statement


Opening stock


Add purchases

Goods available for sale

Less closing stock

Cost of goods sold



Gross profit

Less expenses:

Admin expenses

Finance expenses

Selling expenses

Total expenses



Net profit


David, G. fundamentals of accounting. London: Routledge, 2001.