A budget is a statement of anticipated results during a designated time period expressed in financial and non-financial terms. Budgets cover a designated time period - usually a year. At stated intervals during that time period, actual performance is compared directly with the budget targets and deviations are quickly detected and acted upon. E.g. ofBudgets: Sales budget, production budget, capital expenditure budget, cash budget, master budget etc.

Standard Costing

The cost of production determines the profit earned by an enterprise. The system involves a comparison of the actuals with the standards and the discrepancy is called variance. The various steps involved in standard costing are:

  • Setting of cost standards for various components of cost e.g.: raw materials, labour etc.
  • Measurement of actual performance.
  • Comparison of actual cost with the standard cost.
  • Finding the variance of actual from the standard cost.
  • Findings the causes of variance.
  • Taking necessary action to prevent the occurrence of variance in future.

Responsibility Accounting

Responsibility accounting can be defined as a system of accounting under which each departmental head is made responsible for the performance of his department.


A major part of control consists of preparing reports to provide information to the management for purpose of control and planning.

Standing Orders, Rules and Limitations

Standing orders, rules and limitations are also control techniques used by the management. They are issued by the management and they are to be observed by the subordinates.

Personal Observation

A manager can also exercise fruitful control over his subordinates by observing them while they are engaged in work.

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Principles of Management and Organisational Behaviour Topics