COST ACCOUNTING
FLEXIBLE BUDGETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Should be involved only in the approval process
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Needs to be involved, including using the budget process to communicate goals
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Lacks detailed knowledge of the daily operations and should limit their involvement
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needs to separate the budgeting process and the business planning process into two separate process.
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Detailed explanation-1: -B-need to be involved including use of budget process to communicate goals. Option B is the right answer.
Detailed explanation-2: -Budget Process & Oversight Budget managers are responsible for ensuring that the expenses of the accounts managed do not exceed the unit’s allocated budget. Budget managers are responsible for requesting budget changes, submitting transfers, approving transactions, and requesting payments.
Detailed explanation-3: -Top-down budgeting refers to a budgeting method where senior management prepares a high-level budget for the company. The company’s senior management prepares the budget based on its objectives and then passes it on to department managers for implementation.
Detailed explanation-4: -Which one of the following best describes a reason why a company’s budgeting should be based on the company’s strategic plans? Identifies resources needed to reach strategic goals.
Detailed explanation-5: -Budgets are necessary to highlight the financial implications of plans, to define the resources required to achieve these plans and to provide a means of measuring, viewing and controlling the obtained results, in comparison with the plans.