Question
15.1) The implementation of budgeting in a world-class manufacturing environment may be affected by the impact of (i) a total quality ethos, (ii) a just-in-time
15.1) The implementation of budgeting in a world-class manufacturing environment may be affected by the
impact of (i) a total quality ethos, (ii) a just-in-time philosophy, and (iii) an activity-based focus.
Describe the principles incorporated in EACH of (i) to (iii) and discuss ways in which each may result in changes in the way in which budgets are prepared as compared to a traditional incremental budgeting system.
15.5) A company is proposing the introduction of activity-based costing (ABC) system as a basis for much of its management accounting information.
(a) Describe how ABC is different from a traditional absorption approach to costing and explain why it was developed.
(b) Discuss the advantages and limitations of this 'approach based on activities' for management accounting information in the context of:
(i) preparing plans and budgets
(ii) monitoring and controlling operations
(iii) decision-making, for example, product deletion decisions.
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