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variances analysis variances are the differences between actual results and expected results expected results are the standard costs and standard
the advantages and disadvantages of standard costingthe benefits for controlling having a standard costing system in operation can be summed up as
standard costing and budgetary control in practice the terms standard cost and budgeted cost might be used interchangeably whereas it is possible to
flexible budgetingflexible budget may be used in one of two ways planning and controlat the planning stage when budgets are set to reduce the effect
budget preparation the organizations budget is ready following the acceptance and sanction of the decision packages once the budget of organization
acceptance and allocation of resources managers subsequent a review and analysis of all decision packages will establish the level of resources to be
ranking of decision packages the ranking procedure is employed to establish a rank priority of decision packages in the organization throughout the
analysis of each decision package this analytic procedure permits the manager of the decision package and its alternatives to assess and validate its
recognition of the organizations decision units and decision packages zbb decision unit is an operating division for which decision packages are
definition of the mission and goals of the organization generally the organization has already established mission and aim statements though it may
zero-base budgeting zero-base budgeting zbb was first developed and introduced for business by peter a pyhrr from this starting zbb has been explored
incremental budgeting this is used to describe an incremental cost approach to budgeting where the next period budget is based on the current
contigency theorysome researchers have argued that the context in which budgetary control is used is as important as the style in which it is
disadvantages of participatory budgets they consume more time and therefore are more expensivethe advantage of management participation may be
advantages of participatory budgetsinformation from employees most recognizable with each unitrsquos needs and constraints is includedknowledge
participative budgetsin this approach to budgeting budgets are developed by lower level managers who then submit them to their superiors the budgets
advantages of imposed budgetsadvantagesthey increase the probability that the organization strategic plans are incorporated into the planned
imposed budgetsin this approach to budgeting top management prepares a budget with little or no help from operating personnel which is then
human behavior and budgetary controlan important feature of control in business is that control is exercised by managers over people their attitudes
use of budgetary controlsbudgetary controls are used for the following reasons1 to state the objectives of the organization as a whole2 to reveal the
importance of a budgeta budget is a plan expressed in monetary terms it is prepared prior to the budget period and may show income expenses and the
conditions necessary in a control cyclethere are four necessary conditions that must be satisfied before any system can be said to be controlled such
feed-forward control systemfeed-forward control system describes a system in which deviations in the system are anticipated in a forecast of future
feedback control systemfeedback is information about actual achievements or actual results produced within the organization eg management control
budgetary controlscontrol in a business is the process of guiding organization into viable patterns of activity in an environment the main purpose of