A budget period is a designated timeframe during which a specific budget is planned and implemented, aligning closely with the accounting periods utilized by the organization. Typically, this period spans a year but can be broken down into shorter control periods like months or quarters for enhanced financial oversight.
Budgeted capacity, also known as normal capacity, refers to the productive capacity available in an organization for a budget period as stipulated in the budget for that period. This may be expressed in terms of direct labor hours, machine hours, or standard hours, providing a crucial metric for organizational planning and resource allocation.
A functional budget is a financial or quantitative statement prepared for a specific function of an organization. It summarizes the policies and the expected level of performance to be achieved by that function over a budget period.
Stock budgets are formulated under a budgetary control system to plan the levels of materials, work in progress, and finished goods, both in volumes and values, at specified times throughout a budget period.
