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Inappropriate standards (or targets):
This is a problem arising from deficiencies in planning. If not enough time and resources are devoted to setting accurate standards in the first place, and if they are not kept up to-date, subsequent performance is highly likely to deviate from what was expected.
Mis-measurement of actual results: Scales may be misread, the pilfering of wastage or materials may go unrecorded, items may be wrongly classified (as material X3 say, when material X8 was used in reality), or employees may make ‘cosmetic’ adjustments to their records to make their own performance look better than it really was.
Implementation breakdown:
This means that for a variety of causes employees will not always implement the plan in the way that was intended. The classic example is the purchase of raw materials at a lower than budgeted price, causing quality problems for production. Such problems may arise whether employees act with the best intentions or whether they deliberately take their own course because they do not agree with the plan. They may also be caused by poor communications or inadequate training.
How costs behave as the level of activity/volume changes. Why an understanding of cost behaviour is important ? Types Variable e.g. petrol, direct materials Fixed e.g.
Cause Company is planning to invest in a machine with a useful life of five years and no salvage value. The machine is expected to produce cash flow from operations of $20,000 in e
5
Mosman Ltd makes a single product. The projected sales for the first month of the coming year and the starting and ending inventory data are as follows: Sales 80,000 units Uni
Let a quarry's cost function of producing Q tons of stone per hour be given by TC = Q 3 - 10Q 2 + 40Q + 25, so that marginal cost function is MC= 3Q 2 - 20Q + 40. (i) Find th
Disadvantages of zero base budgeting 1) It is not suitable for all the activities in an organization 2) It has limited application in a profit making organization. In this c
Determine the Zero bases budgeting According to Leonard mere According to Leonard mere, ZBB is a technique which complements and links the existing planning budgeting and revi
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Arrival Rates, Service Rates, and Traffic Intensity The (average) arrival rate is the rate of arrival of customers at a queue, and is often denoted by x. If 10 customers arr
SSI, a meat/burger/chicken processing manufacturing plant loacted in Idaho, USA prepares
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