COST CONTROL BEGINS WITH BUDGETING.

This paper analyzes the production budget of a chemical plant which makes up the foundation of any cost-control system. The author explains how the production budget is prepared, who participates in setting it, and why it is so important to the operations manager. The discussion covers the following topics - the accounting connection; operating managers source of information; the budgeting process; inputs to the production budget; control through variance analysis; three areas of control of operating manager.