Reference no: EM133239588
Organisational resources, uncertainties, performance, government budget responsibility
Required
(a) (i) Explain how the budgeting process helps top managers articulate decisions about the use of resources.
(ii) Explain how a budget identifies the resources available to individual departments within an organisation.
(b) (i) Explain why the cost of resources such as labour and direct materials is uncertain. Include the effects of market forces in your discussion.
(ii) Explain how changes in the price of resources such as labour and direct materials might cause managers to change the way those resources are used.
(iii) Explain how the issues you discussed in parts (i) and (ii) can result in budget variances.
(c) (i) Explain how budgets can be used to measure organisational performance.
(ii) Explain how each of the following budget adjustments improves measurement of variances when evaluating the performance for individual managers within an organisation:
(I) Using flexible budgets to adjust for actual volumes
(II) Removing allocated costs
(III) Updating costs for anticipated price changes
(iii) How can the analysis of budget variances lead to continuous improvement in an organisation?