Question
Every organization, regardless of its profitability or growth, has to maintain control over its expenses. And when customers are cautious in their spending choices, the
Every organization, regardless of its profitability or growth, has to maintain control over its expenses. And when customers are cautious in their spending choices, the need for managers to use budgeting and variance analysis tools for cost control becomes especially critical. By studying variances, managers can focus on where specific performances have fallen short and make corrective adjustments and achieve significant savings for their companies. The drive to achieve cost reductions might seem at odds with the growing push for organizations to pursue environmentally sound business practices. To the contrary, managers looking to be more efficient with their plants and operations have found that cornerstones of the sustainability movement, such as reducing waste and power usage, offer fresh ways to help them manage risk and control costs.
Discuss how establishing standards benefits the following management functions: performance evaluation and decision making.
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