Tuesday, July 23, 2019

Implementing the Budget Essay Example | Topics and Well Written Essays - 750 words

Implementing the Budget - Essay Example The overall aims of budget analysis entails ensuring organizations are efficient and also financially solvent. The revenue variance will be analyzed based on the actual first month income and also actual third month income values. The variance after the first month is calculated as $130,000,000-$11,700,000. This translates into $118,300,000. Likewise the revenue variance after the third month is calculated as $130, 000,000-$41,400,000. This translated to variance of $88,600,000. All the revenue sources of the Transport Department are aids. The annual foreign aid was budgeted at $30,000,000. The annual budgeted state aid was valued at $80,000,000. The annual local aid was valued at $20,000,000. The total aid revenue, therefore, translates to $130,000,000. The revenue variation illustrates difference between the budgeted amount and the actual revenue amount received. The expenditure variance is also calculated based on the first month actual expenditure, and the third month actual expenditure values. The actual first month expenditure value is $9,910,000 while the budgeted annual expenditure value is $129,961,759. The variance is calculated as 129,961,759-9,910,000. This gives $120,051,759 variance. The variance calculation after the third month is $129,961,759-$25,020,000. This gives variance value of $104,941,759. The transport Department faces a lot of challenges during implementation of the budgeting process. These challenges include; time delay, standard setting and variance source information. The Transport Department faces time delay in relation to compiling variance at every month end (Kiego, 2007). For instance, in our analysis, variance was calculated at the end of the first month and at the end of the third month. This compilation of financial data takes a lot of time. The compilation must be adequately done before submitting the results to the department’s management team. In a

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