a) You have been approached by the Managing Director of a small company that has recently been set up. The company is hoping to obtain a significant amount of bank finance to support its activities and it has been asked to supply various documentations as part of its funding application. The Managing Director has provided all the required information except that of the forthcoming year. He has explained to you that he really doesnt understand why this has been requested and further confesses that he is unsure about how exactly a budget is prepared.

Required:

i. State and explain THREE (3) purposes of budgeting.

ii. State the stages in the budgeting process.

iii. Differentiate between master budget and functional budget and identify TWO (2) advantages and ONE (1) disadvantage associated with these budgets.

b) The role of Management Accounting is to assist managers at all levels of management (Strategic, Tactical and Operational) of an organisation in decision-making.

Required:

i. With examples from a manufacturing company, identify FIVE (5) features of information that is provided at the operational level of management.

ii. State TWO (2) features of a control system that is used at the tactical level of management in a commercial entity.

iii. State and explain FIVE (5) features of specific order costing methods used in cost ascertainment.