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Budgeting & Budgetary Control PDF

   

Added on  2021-01-02

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Question 2 and 3
Budgeting & Budgetary Control PDF_1
TABLE OF CONTENTSQUESTION 2..................................................................................................................................3a. Defining production as well as service cost centre and presenting the manner in whichapportionment of cost is done......................................................................................................3b. Stating the benefits of budgetary control system.....................................................................3c. Presenting four assumptions related to break –even analysis..................................................3QUESTION 3..................................................................................................................................4a....................................................................................................................................................41. Presenting variances under different headings........................................................................42. Stating reasons behind the occurrence of variances................................................................43. Relationship between different kind of variances...................................................................5b. Advantages and disadvantages of extracting material price variance at the time of purchasein opposed to the usage................................................................................................................5REFERENCES................................................................................................................................6
Budgeting & Budgetary Control PDF_2
QUESTION 2a. Defining production as well as service cost centre and presenting the manner in whichapportionment of cost is done Production cost centre: It implies for the centre or area where production related work iscarried out. Service cost centre: This refers to the one which is engaged in rendering services to theproduction cost centre. From assessment, it has identified that service department cost in a factory need to be re-apportioned over production cost centre. The rationale behind this, service cost centre exist forproviding services to other cost centres in an organization (Mueller, 2018). Moreover, servicecost centre do not work directly for producing the final product. Ways or methods of cost reapportionment Direct method Step-down methodb. Stating the benefits of budgetary control system Advantages or benefits of budgetary control system Facilitates centralized control Helps management team in finding up and setting responsibility Ensures better co-ordination among the various departments of an organization (Mackand Goretzki, 2017) Offers opportunity in relation to taking strategic actions or measures on time forperformance enhancement c. Presenting four assumptions related to break –even analysis BEP analysis helps in assessing the number of units that need to be sold for attaining theposition of no profit no loss. Such analysis or evaluation is based on some specific assumptionssuch as:
Budgeting & Budgetary Control PDF_3

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