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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.
UNCERTAINTY OF DEMAND Demand is the most troublesome variable to predict accurately. Actually, demand may fluctuate from day to day, from week to week or from month to month. T
One of the main deities of the financial manager is to keep a sound liquidity position for the firm hence the dues are settled as and while they mature. Separately from this the fi
What is the Flexible budgets A flexible budget consists of a series of budgets for different level of activity. It therefore varies with the level of activity attained. A flex
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Operating cycle considers to the average time lapse among the acquisition of raw material and the final cash realization. This notion is used to determine the needs of cash working
Gather Data about Alternatives When potential areas of activity are specified, management must assess the potential growth rate of the activities, the capability of the company
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Explain Current budgets Current budgets: the period of current begets is generally of months and weeks. These budget relate to the current activities of the business. According
how to i get financial report for my company Anuz Wpp
After going through this section, you must be capable to: Know the need for establishing sound credit policy; Identify the different credit policy variables; Know the cred
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