Define the following terms: (i) Controllable Variance (ii) Uncontrollable Variance (iii) Budget Manual (iv) Performance Budgeting (v) Budget Period

(i) Controllable variances: Controllable variances are those which can be controlled under the normal operating conditions if a responsibility centre takes preventive measures and acts prudently. Responsibility centres are answerable for all adverse variances which could have been controlled. (ii) Uncontrollable variances: Uncontrollable variances are those which occurs due to conditions which are beyond the control of a responsibility centre and cannot be controlled even though all preventive measures are in place. (iii) Budget Manual: The budget manual is a booklet specifying the objectives of an organisation in relation to its strategy. The budget is made to decide how much an organisation would earn and spend and in what manner. In the budget, the organisation sets its priorities too. Budget manual is also defined as, “A document which sets out the responsibilities of the persons engaged in, the routine of, and the forms and records required for, budgetary control." Effective budgetary planning relies on the provision of adequate information to the individuals involved in the planning process. Many of these information needs are contained in the budget manual. A budget manual is a collection of documents that contains key information for those involved in the planning process. (iv) Performance budgeting: Performance budgeting (PB) involves evaluation of the performance of an organisation in the context of both specific as well as overall objectives of the organisation. Performance Budgeting provide a meaningful relationship between estimated inputs and expected outputs as an integral part of the budgeting system. A performance budget is one which presents the purposes and objectives for which funds are required, the costs of the programmes proposed for achieving those objectives, and quantitative data measuring the accomplishments and work performed under each programme. Thus, PB is a technique of presenting budgets for costs and revenues in terms of functions. Programmes and activities correlate the physical and financial aspect of the individual items comprising the budget. (v) Budget period: The period covered by a budget is known as budget period. There is no general rule governing the selection of the budget period. In practice the Budget Committee determines the length of the budget period suitable for the business. Normally, a calendar year or a period co-terminus with the financial year is adopted. The budget period for the calendar or financial year is then divided into shorter periods; it may be monthly or quarterly or for such periods as coincide with period of trading activity of the business.