COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Settle disputes among operating divisions during the development of the budget.
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Develop the annual profit plan by selecting the alternatives to be adopted from the suggestions submitted by the various operating segments.
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Justify the budget to the executive committee of the board of directors.
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Force the final profit plan to conform to the organization’s strategy.
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Compile the budget and manage the budget process.
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Detailed explanation-1: -Answer (D) iscorrect. The budget department is responsible for compiling the budget and managing thebudget process. The budget director and department are not responsible for actuallydeveloping the estimates on which the budget is based. This role is performed bythose to whom the resulting budget will be applicable.
Detailed explanation-2: -The Director, Accounting and Budgeting assists deans and department heads with planning and projecting revenues and expenses and produces budget reports that allows departments to manage and analyze their budgets.
Detailed explanation-3: -The Budget Committee is responsible for developing the annual budget resolution. The budget resolution is a mechanism for setting forth aggregate levels of spending, revenue, the deficit or surplus, and public debt.
Detailed explanation-4: -Budgeting allows managers to explore how costs and revenues will behave under specific sets of operating assumptions. The process often points out conflicts between top management’s objectives and the realities of the company’s capabilities.
Detailed explanation-5: -Budget Director directs and controls an organization’s budgeting and financial forecasting activities. Leads the budgeting process for annual, quarterly, and monthly budget development. Being a Budget Director develops budgetary policies and guidelines to meet short and long-term financial goals.