There are several types of budgets that can be used by organizations depending on their time horizon and nature. Long term budgets span 5-10 years and are used by senior management for research and development or long term financing. Short term budgets cover 1-2 years and are used by industries like textiles. Current budgets focus on months and weeks and cover current activities. Budgets can also be categorized by their functions such as production, sales, expenses, cash flow, capital expenditures, and more. Master budgets integrate the various functional budgets into a single summary budget that is used to coordinate departments. Budgets can also differ in their flexibility, with fixed budgets being less adaptable to changes compared to flexible budgets.

1. Sujoykrpaul Assam University,silchar Types of Budget

2. Budgets

3. Time nature Long term- 5-10 years, Top level management, Used by those industries where gestation(dev. period) period is long, Mostly done in R&D, long term finances etc. Short term- 1-2 yrs, Monetary nature Industries like Cotton, Textiles uses the short term budgets Current Budget Months & weeks, Current activities,

4. On the basis of Functions-Operating Sales Budget Production Budget Production Cost Budget Purchase Budget Raw material Budget Labor Budget Plant Utilization Budget Manufacturing/Works Overhead Budget, Administrative & Selling Expenses Budget Program Budget Responsibility Budget

5. Contd.. Program Budget- Expected revenues Product/project are considered as major program, Locate where to reduce the cost & increase revenues, Determine the imbalances & inadequacies Corrective action can be taken Responsibility Construct the responsibility areas like Cost/Expenses centre, Profit centre, Investment Centre, Plans in terms of person, Control device

6. Functions - Financial Cash Budget Working Capital Capital Expenditure Income Statement Statement of Retained Earning Budget, Budgeted Balance Sheet or Position statement Budget.

7. Function-Master Various functional budget are integrated Summary budget incorporating its functional budget, Prepared by budget officer, Used to coordinate among the various functional department. Control device

8. Flexibility Fixed Units are overlooked Given level of activity Before the beginning of FY Anticipated changes are not adjusted, Suitable under static condition, Useful when sales, expenses & costs can be forecasted with great accuracy. Flexible Consists of series of budgets Varies with the level of activity attained. Prepared after considering the unforeseen changes, Difference between fixed, semi-fixed & variable cost.