Advanced

(a) Discuss the use of the following as aids to each of planning and control:

(i) rolling budgets

(ii) flexible budgets

(iii) planning and operational variances.

(9 marks)

(b) Discuss the extent to which the incidence of budgetary slack is likely to be affected by the use of each of the techniques listed in (a).

(6 marks) (Total 15 marks) ACCA Paper 9 Information for Control and Decision Making 16.6Advanced In the context of budgetary control, certain costs are not amenable to the use of flexible budgets. These include some costs which are often called ‘discretionary’ (or ‘programmed’).

You are required to explain:

(a) the nature of discretionary (or programmed) costs and give two examples;

(b) how the treatment of these costs differs from that of other types of cost in the process of preparing and using budgets for control purposes. (20 marks)

CIMA P3 Management Accounting