Accounting DQ
Many upper level managers consider the budget to be a living document. What do they mean by this and do you agree with their assertion? Why? Why not?
When it comes to evaluating performance, a static budget could end up being very misleading. Since a flexible budget is based on sales volume and cost driver activity, it tends to be more accurate when assessing performance.
Class - Based on your readings, what might be a couple of reasons why actual performance might not conform to the master budget?
Author's Corner Video "Budgets"
Discuss the importance of budgeting on the home front - in your personal finances. How do you do it and what changes will you make in light of what you learned this week?
Author's Corner Video "Responsibility Reports and Standard Cost"
Author's Corner Video "Variance Analysis and Balanced Scorecard"