The role of budgeting and forecasting allows Corporations to plan for future requirements. Frequently product pricing and breakeven analysis will drive the budgeting process. This is a three$-$page analysis following APA guidelines for citations.

In preparing your analysis, consider the following budgeting concepts:

Address the reasons for and benefits of budgeting.

Discuss the concept of using budgets for variance analysis and strategy.

Searching within the $746$ pages of downloadable Managerial Accounting Volume II in the e$-$readings, you will find highlights of padding in budgeting where managers budget low expectations to enable actual results to look good. $($Hint: Search for the word "padd" to allow for variations$).$ How does this provide short$-$term positive results for rewards$/$recognition$?$ This is an important concept to understand and evaluate.

How are budgets used to evaluate performance $($i$.$e$.,$ variance analysis$)?$

How can and should management use variance analysis for strategic purposes?

How would a company be affected by a budget strategy based on personal goals $($i$.$e$.,$ padding the budget to make short$-$term operational results look good$)$ rather than budgeting based on current and future market analysis?

How might this affect sales dollars, sales volume, and profits? Consider the impact of this budgeting decision on the corporation's plans for future financing, production volume, and capacity $($both short$-$term and long$-$term$).$

How products are priced impacts budgeting. Consider the concept of breakeven analysis and target income.

To apply breakeven analysis, why would the expenses reported in external financial reports need to be reorganized into categories based on cost behavior?

How do these analytical tools relate to product pricing and cost management $($i$.$e$.,$ why would this analysis be useful to management$)?$

Why would a company seek to position its products as low$-$priced or high$-$priced items in the marketplace? How might this affect sales dollars, sales volume, and profits?