The budget is a quantified monetary plan for a future period that drivers are trying to reach.
Standard is a predetermined quantitative target that is available under certain circumstances.
Budgets and standards are similar to the following: [Both] include both thinking about the future and predicting what is happening under certain circumstances.
o Both are used for audit purposes. We then compare the budget support controls that determine the financial goals or the expenditures and collect the budgets and, if necessary, take action to correct any deviation. A standard compares the control result by comparing actual results with a predetermined target
Similarity, budgets and standards are interconnected
For example, the standard unit of production cost can be based on a budget for a production cost. Unit costs are multiplied at the level of budget activity to reach the budget expenditures on production costs.
There are, however, significant differences between budgets and norms,
o The budget includes a functional or cost-based total cost center, where it displays standard resource utilization as a standard for a single task, such as standard work hours for a single manufacturing unit.
o The use of standards is limited to cases where duplicate operations are performed and the output is measurable. Budgets can be prepared for all functions, even if the output is measurable.
o The standard does not need to be expressed in cash. For example, standard output levels can be determined for control purposes without having to give financial value to it. In contrast, the budget in cash
In summary, budgets and standards are very similar and interrelated, but there are significant differences between them.
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