OCTOBER –
NOVEMBER
2020
, BUDGETING & PLANNING; PLANNING &
CONTROLLING INVENTORY; COST ESTIMATION
& COST BEHAVIOUR; MAKE OR BUY DECISION;
LONG – TERM EXTERNAL PRICE SETTING;
DIRECT & ABSORPTION COSTING; ACTIVITY –
BASED COSTING; STANDARD COSTING;
ADVANCED CVP ANALYSIS; OPTIMUM
PRODUCTION MIX; PROCESS COSTING;
QUALITATIVE FACTORS; BUSINESS RISKS; &
ETHICAL & SOCIAL MATTERS
(a) Useful functions of budgets
Any two of the following
1. Planning annual operations
The budgeting process ensures that managers do plan for future operations, and
that they consider how conditions in the next year might change and what steps
they should take now to respond to these changed conditions. This process
encourages managers to anticipate problems before they arise, and hasty
decisions that are made on the spur of the moment, based on expediency rather
than reasoned
judgement, will be minimized.
2. Coordinating the activities of the various parts of the organization and
ensuring that the parts are in harmony with each other
The budget serves as a vehicle through which the actions of the different parts of
an organization can be brought together and reconciled into a common plan.
Budgeting therefore compels managers to examine the relationship between
their own operations and those of other departments, and, in the process, to
identify and resolve conflicts.
3. Communicating plans to the various responsibility centre managers
Through the budget, top management communicates its expectations to lower -
level management, so that all members of the organization may understand
these expectations and can coordinate their activities to attain them. It is not just
the budget itself that facilitates communication – much vital information is
communicated in the actual act of preparing it.
NOVEMBER
2020
, BUDGETING & PLANNING; PLANNING &
CONTROLLING INVENTORY; COST ESTIMATION
& COST BEHAVIOUR; MAKE OR BUY DECISION;
LONG – TERM EXTERNAL PRICE SETTING;
DIRECT & ABSORPTION COSTING; ACTIVITY –
BASED COSTING; STANDARD COSTING;
ADVANCED CVP ANALYSIS; OPTIMUM
PRODUCTION MIX; PROCESS COSTING;
QUALITATIVE FACTORS; BUSINESS RISKS; &
ETHICAL & SOCIAL MATTERS
(a) Useful functions of budgets
Any two of the following
1. Planning annual operations
The budgeting process ensures that managers do plan for future operations, and
that they consider how conditions in the next year might change and what steps
they should take now to respond to these changed conditions. This process
encourages managers to anticipate problems before they arise, and hasty
decisions that are made on the spur of the moment, based on expediency rather
than reasoned
judgement, will be minimized.
2. Coordinating the activities of the various parts of the organization and
ensuring that the parts are in harmony with each other
The budget serves as a vehicle through which the actions of the different parts of
an organization can be brought together and reconciled into a common plan.
Budgeting therefore compels managers to examine the relationship between
their own operations and those of other departments, and, in the process, to
identify and resolve conflicts.
3. Communicating plans to the various responsibility centre managers
Through the budget, top management communicates its expectations to lower -
level management, so that all members of the organization may understand
these expectations and can coordinate their activities to attain them. It is not just
the budget itself that facilitates communication – much vital information is
communicated in the actual act of preparing it.
