Some people suggest that because of the complexities and uncertainties in the business and economic environment, it is pointless to plan and to budget. Based on what you know from your study of management accounting, why is this bad advice? How would you respond to this issue? Make specific refer-ence to relevant issues in the course.[4]

a) Why should we not be satisfied with all favourable or all unfavourable

variances?

b) How can we tell that the process of variance analysis is working effect-

ively?

c) List three(3) actions that should be taken after variances have been

identified. Identify the people/positions WHO should be addressed.

WHAT questions should be asked, and reasons WHY variances are

unacceptable [7]

3. a) What are the benefits of a flexible budget? [2]

4 . Explain the term: MANAGEMENT CONTROL [2]

.

In a decentralized organization, managers are recognized as being respons-ible for identified segments of the organization. How can you identify a seg-ment of a decentralized organization? Given your answer to the previous question, how can senior management ensure goal congruence while allowing individual managers autonomy

Some people suggest that because of the complexities and uncertainties in the business and economic environment, it is pointless to plan and to budget. Based on what you know from your study of management accounting, why is this bad advice? How would you respond to this issue? Make specific refer-ence to relevant issues in the course.[4]

a) Why should we not be satisfied with all favourable or all unfavourable

variances?

b) How can we tell that the process of variance analysis is working effect-

ively?

c) List three(3) actions that should be taken after variances have been

identified. Identify the people/positions WHO should be addressed.

WHAT questions should be asked, and reasons WHY variances are

unacceptable [7]

3. a) What are the benefits of a flexible budget? [2]

4 . Explain the term: MANAGEMENT CONTROL [2]

.

In a decentralized organization, managers are recognized as being respons-ible for identified segments of the organization. How can you identify a seg-ment of a decentralized organization? Given your answer to the previous question, how can senior management ensure goal congruence while allowing individual managers autonomy