What are the disadvantages of incremental budgeting, Managerial Accounting

Assignment Help:

Disadvantages of incremental budgeting

a) Incremental budgeting suppose activities and method of working will continue in the same way

b) No incentive for developing their development new ideas

c) No incentive to decrease costs

d) Encourages spending up to the budget so that the budget is maintained next year

e) The budget may become out of date and no longer relate to the level of activity or type of work being carried out

f)  The priority for resources may have changed as the budget were originally set

g) There may be budgetary slack built into the budget which is never reviewed. Managers might have overestimated their needs in the past in order to obtain a budget which is simpler to work within and which will permit them to achieve favorable results.

 

 


Related Discussions:- What are the disadvantages of incremental budgeting

Job-Order Costing, Compute the ending balance in the Work in Process invent...

Compute the ending balance in the Work in Process inventory account. Assume that this balance consists entirely of goods started during the year. If $32,200 of this balance is dire

Adjacent extreme points, Adjacent extreme points differ in only one variabl...

Adjacent extreme points differ in only one variable The first observation indicates that we can identify the extreme points of the solution space algebraically by setting zero as

Provision for contingencies, After determining the amount of working capita...

After determining the amount of working capital as in above, a specific amount say 5 percent or 10 percent may be added to cover contingencies. This is to be noted that facts depen

Decision - making, Decision Making Some managers appear to have an...

Decision Making Some managers appear to have an intuitive sense of good decision making. The reality is that good decision making is hardly ever done by intuition. Consist

Classification of costs, discuss which of the cost classification is suitab...

discuss which of the cost classification is suitable for LunchBreak LTD and why?

Amount of working capital, Number of Operating Cycles: The number of opera...

Number of Operating Cycles: The number of operating cycles in a period is determined by dividing the number of days in a year i.e.365 by the length of net operating cycle. Express

Bulk agency factoring, Bulk Agency Factoring : In this category factorin...

Bulk Agency Factoring : In this category factoring is essentially used as a method of financing book debts. In this sort of factoring the client continues to administer credit a

Explain ranking of decision packages - zero base budgeting, Explain Ranking...

Explain Ranking of decision packages - zero base budgeting Ranking of decision packages: by ranking the decision packages a company will be able to weed out a lot of marginal e

Illustrate what the traffic can bear pricing, What the traffic can bear pri...

What the traffic can bear pricing Pricing based on what the traffic can bear is not a sophisticated method. It is used by retail traders as well as by some manufacturing firms.

Stock turnover ratio, opening stock 19000 closing stock 21000 sales 200000 ...

opening stock 19000 closing stock 21000 sales 200000 gross profit 25% on sales calculate stock turnover ratio

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd