- 20 Marks
IMAC – MAR 2024 – L1 – Q2 – Budgeting
Explain the steps in the annual budgeting process, conditions for successful budget implementation, and identify short-term investment options available to Komba Ltd.
Question
Komba Ltd is a manufacturing company that wants to allocate some funds for short and long-term investments. To support this purpose, Komba Ltd is organizing its annual budget preparation for the coming year. Some senior management of the company are wondering what the budgeting process is about and would be interested in having a better understanding of the annual budgeting process.
Required:
As the cost accountant of Komba Ltd:
a) Explain FIVE (5) steps to be involved in the annual budgeting process. (10 marks)
b) State FIVE (5) conditions for a successful implementation of a budgeting process. (5 marks)
c) Explain TWO (2) short-term investments available to Komba Ltd. (5 marks)
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