Article: Management accounting--performance evaluation: Grahame Steven compares budgeting methods and considers whether the activity-based approach provides a basis for better financial planning.(study notes: PAPER P1)

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Although a number of commentators have questioned the value of budgeting and continue to question it (see September's Study notes article on paper P1, for example), most companies use budgets, since they provide a framework for strategic direction and operational control. For instance, a CIMA-backed research project involving 41 UK companies last year revealed that only one of the sample didn't use budgets. It's clear, therefore, that budgeting is still part of the lifeblood of enterprise, but the key question concerns how to ensure that it remains relevant for modern organisations.

Let's look at the fictional case study of Great Wall Cellars to ...

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