CASE STUDY: ACTIVITY BASED BUDGETING AT AGRICULTURAL HOLD-INGS IN LITHUANIA

Ramunė Pockevičiūtė

CASE STUDY: ACTIVITY BASED BUDGETING AT AGRICULTURAL HOLD-INGS IN LITHUANIA

Successful business operations are hardly possible without planning. Therefore presently there are extensive discussions about the importance of planning business activities and estimating the resources required to achieve the objectives set by an enterprise. For this purpose, scientists and practitioners suggest that enterprises should implement a budgeting system. This paper introduces a budgeting model for agricultural holdings using the Activity Based Costing (ABC) approach. The topic of the paper was chosen in view of the fact that such a combination of accounting management elements is not broadly used by Lithuanian agricultural holding. The key objective of this paper is to present the budgeting system as an important tool in planning and managing the business of an agricultural enterprise. This paper looks into the theoretical principles and provides a practical model of the budgeting system. The performed research leads to a conclusion that more accurate production cost calculations, budgeting, and budget control are the safeguards, which help to prevent business failures in the changing and adverse business environment.

Key words: budget, budgeting system, cost, costs, activity, Activity Based Costing (ABC).
JEL Classification: M41.

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