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Limitations of Budgeting
1. Too mush reliance may reason resistance or inflexibility to change.
2. Difficult to set levels of attainment. It may result into too tight budgets that reasons loss of morale.
3. Antagonism whereas budgets exert undue pressure.
4. Budgeting control is a terminate exercise and hence any type of report from investigation of variances may be of little employ to the current operations.
Imperial Sandwich Plc is to be established shortly. The founders are considering their options with regard to capital structure. A total of £5 m will be required to establish the b
The following information is provided to you concerning Lydia Ltd as at 30 June 2012. Assume a company tax rate of 30%. (i) The balance of rent received in advance in the balan
The level of activity at which total revenues eqivalent total costs. A point at which there is no profit and no loss.
First In First Out or FIFO Method - Work in Progress This method considers merely those costs incurred throughout the recent period. Equivalent units are calculated given a
Rayya Co. purchases and installs a machine on January 1, 2013, at a total cost of $105,000. Straight-line depreciation is taken each year for four years assuming a seven-year life
a machine is purchased on july 1 2009 for $181,500. It has an expected useful life of 11 years and no salvage value. After five years, the machine is sold for $98,000 cash. What is
Beaver Company (a multi-product firm) produces 5,000 units of Product X each year. Each unit of Product X sells for $8 and has a contribution margin of $5. If Product X is disconti
Eckels Wares is a division of a major corporation. The following data are for the latest year of operations: Sales
The activity driver for the shipping activity is the number of orders shipped. Product A uses 20 orders and Product B uses 60 orders. Calculate the consumption ratios for each prod
Question P A RT A Borrico ltd manufacture a single product and they had currently introduced a system of budgeting and variance analysis. The subsequent information i
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