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Incremental budgeting
This is used to describe an incremental cost approach to budgeting where the next period budget is based on the current year’s results plus an extra amount (an increment) for estimated growth or inflation next period.
Incremental budgeting is sufficient only if current operations are effective, efficient and economical without an alternative course of action available to the organization. Although incremental budgeting is easy to prepare, it encourages slacks and wasteful spending to creep into budgets and become a normal feature of actual spending. It does not encourage performance to be improved or looking for alternative ways of carrying out the production.
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Discuss the different roles played by the qualitative and quantitative approaches to managerial decision making
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Transfer pricing with third party consequences Transfer prices are used not only for internal record keeping and performance evaluation purposes. There are several settings
Describe the Limitations of management accounting: 1. Based on accounting information: the correctness and effectiveness of managerial decisions will depend upon the quality
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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
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