What is the responsibility of operating budget, Managerial Accounting

Assignment Help:

What is the Responsibility of operating budget

when the operating budget of a firm is constructed in terms of responsibility areas it is called the responsibility budget shows the plan in terms of persons responsible for achieving them. It is used by the management as a control device to evaluate the performance of executives who are uncharged of various cost centers. Their performance is compared to the targets (budgets), set for them and proper action is taken for adverse results if any. The kinds of responsibility areas depend upon the size and nature of business activities and the organization structure. However responsibility areas may be classified under three broad categories:

Cost centre

Profit centre

Investment centre


Related Discussions:- What is the responsibility of operating budget

Example of credit standards, The current sales of M/s ABC are Rs.100 lakhs....

The current sales of M/s ABC are Rs.100 lakhs. Through relaxing the credit standards the firm can produce additional sales of Rs.15 lakhs on that bad debt losses would be 10 percen

Deferred tax assets and liabilitie, Prepare a multiple step income statemen...

Prepare a multiple step income statement, and classified balance sheet for XYZ Corporation for 2013 in good form. The income statement should include the proper earnings per share

Explain the external factors of pricing decisions, Explain the External fac...

Explain the External factors of pricing decisions 1) Demand: the market demand for a product or service obviously has big impact on pricing. Since demand is affected by fact

Non-zero lead time, Non-zero lead time (determining reorder point) This...

Non-zero lead time (determining reorder point) This basic EOQ model assumes that the suppliers lead time is zero (i.e. goods are delivered immediately on the day the order was

Letter of credit, In the documentary bills the seller faces a lot of risk a...

In the documentary bills the seller faces a lot of risk as the risk of non-acceptance or non-payment of goods. This poses a main risk for the seller. These additional securities in

Explain the interest coverage ratio, Interest coverage ratio (or debt servi...

Interest coverage ratio (or debt service ratio)  Meaning: this ratio establishes a relationship among net profits before interest and taxes and interest on long debt. Obj

Cost classification, identify and explain cost classification for performan...

identify and explain cost classification for performance evaluation

Cash planning, Firms need cash to invest in inventory, receivables and fixe...

Firms need cash to invest in inventory, receivables and fixed assets and to create payments for operating expenses, so as to increase earnings and sales and make sure the smooth ru

Budget preparation-monitoring and evaluation , Budget Preparation The ...

Budget Preparation The organization's budget is ready following the acceptance and sanction of the decision packages. Once the budget of organization has been accepted manager

Advantages and limitations of game theory, Advantages and limitations of ga...

Advantages and limitations of game theory Advantage: Game theory helps us to learn how to approach and understand a conflict situation and to improve the decision maki

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