ACCT 2101 Chapter Notes - Chapter 10: Budget, Variable Cost, European Cooperation In Science And Technology
Document Summary
Cpt 10: budgetary control, use of budgets in controlling operations, takes place in budget reports that compare actual results with planned objectives. Involves: developing budgets, analyzing the difference between actual and budgeted results, modifying future plans, if necessary. Taking corrective action: works best when a company has a formalized reporting system which should. Identify the name of the budget reports, such as the sales budget or manufacturing overhead budget. State the frequency of the report, such as weekly or monthly. Static budget reports: does not modify or adjust data regardless of changes in activity during the year. Is appropriate in evaluating a (cid:373)a(cid:374)ager"s effectiveness in controlling costs when: The actual level of activity closely approximates the master budget activity level. The behavior of the costs in response to changes in activity is fixed. Identify the activity index and the relevant range of activity. Identify the variable costs, and determine the budgeted variable cost per unit of activity for each cost.
