Running Head: BUDGET PLANNING AND CONTROLBudget Planning and Control:Babycakes Case SynthesisStudents NameProfessorCourseDate1BABYCAKES CASE SYNTHESIS21. Benefits of a Good Budget at Baby CakesBudgeting is an essential short-term financial planning process for all organizations. Abudget can run a business for a year or less, with most small businesses having quarterlybudgeting intervals. There are several benefits of budgeting. The first benefit is promotion ofefficiency. At Babycakes, efficiency means achieving the maximum market potential withoutwastage. Erin McKenna realized that they were, at times producing cupcakes that were notsufficient for the market in peak seasons such as the Valentines day, and had to sell some cakesfrom previous days on low seasons. This can be eliminated by proper budgeting. The secondbenefit will be waste deterring, since a budget will be able to restrict the business to efficientproduction (Horngren, Foster, Datar, Rajan, Ittner, & Baldwin, 2010).The third and most important benefit is forecasting. Budgets in the current day that arewritten well will guide Erin in designing even better budgets in the future, following the trends,and observing the mistakes done in the past budgets. Good budgets motivate employees, sincethey realize that they are not making cupcakes that are not in demand due to too much waste, andthey do not feel that they are failing to cater for their market due to insufficient amount ofpr ...
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