Question 4 25 Marks

Mr. Ahmad is a management accountant. He has been approached by Mr. Jaber to get some advice about Budgeting Techniques and Objectives.

Mr. Jaber has recently been appointed as Managing director of long-established family firm Uniform Manufacturing Company (UMC) which manufactures school uniforms for selling to different retail stores.

It also operates two of its own retail stores in the school area. UMC is a profitable company. Mr. Jaber is concerned that no one is exactly knowing how profitable it should be.

Mr. Jaber realizes that they should have proper budget so that they can measure their performance. He is aware about learning curve theory but has no idea as how to work on it.

As a management accountant you (Mr. Ahmad) suggest Mr. Jaber about the following:

1. The time for first set of uniform was 3 hours, the time for 2^nd set was 2.5 hours. What is the learning Curve percentage? Show your workings clearly. 8 Marks

2. Identify and explain different objectives of Budgetary control system. 8 Marks

3. There are different budgeting techniques used by the organization, advise Mr. Jaber on appropriate budgeting techniques for Uniform Manufacturing Company. 9 Marks.