In your simulation game play you have been tracking many different financial metrics including; net income, ending cash flow, and retained earnings. Understanding the financial health of your business is critical to its success over the short and long term as you have seen in the simulation play. Budgeting is a key skill that will help you achieve healthy financial numbers and organizational effectiveness.
For this week’s Discussion topic you will be reviewing the case study on budgeting for Kraft Foods UK, at this link. http://businesscasestudies.co.uk/kraft-foods-uk/budgeting-and-strategy/what-is-a-budget.html
When you have completed reviewing this case study, and using the other readings and resources for this week you will answer the following questions:
1.Why is budgeting important to an organization?
2.What is the relationship between an organization’s objectives and its budgets?
3.Give an example of the way in which variance analysis will help Kraft to become more effective.
4.What sorts of expenses does Kraft incur? How does budgeting help to control these expenses?
5.Why is double loop feedback sometimes required in budgeting?
6.How can you use this information in preparing the final project with your team?
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Budgeting is important to an organization because it helps to limit expenditure, creates a financial roadmap for business operations, and enables planning for business expansion and future growth. Reviewing previous budgets allows organizations to gauge their ability to stick to...