ABSTRACT
Professional accountants and accountants in commerce and industry are on the whole unaware of the latest developments in this particular technique and of the advantages to be derived and the economies to be gained therefrom. This chapter briefly describes the nature of budgetary control and some of the general principles governing its application and operation; it does not attempt to describe in detail how a complete system can be installed or operated. Until the present technique of combining budgetary control and standard costs was developed, a detailed comparison of current costs with those of previous periods was necessary in order to review operating costs. The fundamental features of a system of budgetary control and standard costs are that standards are set for all functions of a business; actual results are rapidly compared with these standards. Standards imply scientific specifications for quantity and quality of materials and highly efficient manufacturing methods and speeds.
