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Performance budget: it involves evaluation of the performance of the organization in the context of both overall and specific objectives of the organization. As per the National Institute of Bank Management, performance budgeting is the procedure of identifying, analyzing, simplifying and crystallizing particular performance objectives of a job to be achieved over a period in the frame work of the organizational objectives, the idea and the objectives of the job. Performance budgeting needs preparation of performance reports which compare the actual data and budget and demonstrate the variances existing between both. The responsibility for preparing these reports lies with the respective departmental head. Every departmental head will be supplied with a copy of the section of the master budget suitable to his sphere. This report may be prepared regularly, every week, month or any basis based on the size of business and the budget period. The reason of submitting these reports is to convey promptly the information about the deviations in actual and budgeted activity to the decision makers so that necessary corrective actions can be taken to correct the deviations.
Several ADVANTAGES of Performance budgeting is as follows:
Fundamentals for a successful adoption of Performance budgeting are:
• The accounting system should be suitably detailed and co-ordinate to offer necessary data for reports designed for the particular use of the individual or cost centers having primary responsibility for specific costs.
Prevention of Risk - Method of risk management In case of this method, the business avoids risk by taking appropriate steps for prevention of business risk or avoiding loss, su
The following are various types of orders prevalent in the US markets: Market Order : The most common form of order is the market order, which means the order to buy or sell at
a) Year 2 Year 1 Stock turnover (350/500) * 365 = 255.5 days (250/450) * 365 = 202.7 days
Q. Benefits of Interest rate swaps? Interest rate swaps may provide several benefits to companies including: - The ability to get finance at a cheaper cost than would be p
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Calculation of weighted average cost of capital (WACC) Market values Market value of equity = 5m × 4.50 = $22.5 million Market value of preference shares = 2.5m × .0762 =
In 2005, Mr. Gordon Brown's brought up a plan of action to help reduce poverty and boost economic development in Africa. The three essential elements of the 2005 development plan
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what are the ten agency problems between shareholders and auditors and their solutions
Calculated betas provide different information if they are obtained by using daily, weekly or monthly data. Which data is the most appropriate? Fernández and Carabias (2007) an
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