The variances discussed in Chapter 15 (for manufacturing overhead) are all components of a shortterm financial control system. These variances are calculated using standard manufacturing costs and flexible budgets. As was argued in the text (both in Chapter 15 and elsewhere) a financial control system is but part of a more comprehensive management accounting and control system

. Required: 1. What are the primary limitations of short-run financial control measures?

2. How can a short-run financial control system be expanded to become a more comprehensive management accounting and control system?

Discuss, in at least some detail, how and why you would expand the system in an attempt to provide management with more useful information