Discuss the four components of Budgetary Control System.

These functional budgets are broadly grouped under the following heads: 1. Physical budgets: Those budgets which contain information in quantitative terms such as the physical units of sales, production etc. This may include quantity of sales, quantity of production, inventories, and manpower budgets are physical budgets. 2. Cost budgets: Budgets which provides cost information in respect of manufacturing, administration, selling and distribution, etc. for example, manufacturing costs, selling costs, administration cost, and research and development cost budgets are cost budgets. 3. Profit budgets: A budget which enables the ascertainment of profit. For example, sales budget, profit and loss budget, etc. 4. Financial budgets: A budget which facilitates in ascertaining the financial position of a concern, for example, cash budgets, capital expenditure budget, budgeted balance sheet etc.