[1] The major objectives of any budget system are toA. Foster the planning of operations, provide a framework for performance evaluation, andpromote communication and coordination among organization segments.B. Define responsibility centers, facilitate the fixing of blame for missed budget predictions,and ensure goal congruence between superiors and subordinates.C. Define responsibility centers, provide a framework for performance evaluation, andpromote communication and coordination among organization segments.D. Foster the planning of operations, facilitate the fixing of blame for missed budgetpredictions, and ensure goal congruence between superiors and subordinates.

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Answered: Foster the planning of operations,…

Foster the planning of operations, provide a framework for performance evaluation, and promote communication and coordination among organization segments.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 31P: The actions listed next are associated with either an activity-based operational control system or a...

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Question

[1] The major objectives of any budget system are to
A. Foster the planning of operations, provide a framework for performance evaluation, and
promote communication and coordination among organization segments.
B. Define responsibility centers, facilitate the fixing of blame for missed budget predictions,
and ensure goal congruence between superiors and subordinates.
C. Define responsibility centers, provide a framework for performance evaluation, and
promote communication and coordination among organization segments.
D. Foster the planning of operations, facilitate the fixing of blame for missed budget
predictions, and ensure goal congruence between superiors and subordinates.

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The actions listed next are associated with either an activity-based operational control system or a traditional operational control system: a. Budgeted costs for the maintenance department are compared with the actual costs of the maintenance department. b. The maintenance department manager receives a bonus for beating budget. c. The costs of resources are traced to activities and then to products. d. The purchasing department is set up as a responsibility center. e. Activities are identified and listed. f. Activities are categorized as adding or not adding value to the organization. g. A standard for a products material usage cost is set and compared against the products actual materials usage cost. h. The cost of performing an activity is tracked over time. i. The distance between moves is identified as the cause of materials handling cost. j. A purchasing agent is rewarded for buying parts below the standard price set by the company. k. The cost of the materials handling activity is reduced dramatically by redesigning the plant layout. l. An investigation is undertaken to find out why the actual labor cost for the production of 1,000 units is greater than the labor standard allowed. m. The percentage of defective units is calculated and tracked over time. n. Engineering has been given the charge to find a way to reduce setup time by 75 percent. o. The manager of the receiving department lays off two receiving clerks so that the fourth-quarter budget can be met. Required: Classify the preceding actions as belonging to either an activity-based operational control system or a traditional control system. Explain why you classified each action as you did.
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The major objectives of any budget system are to Define responsibility centers, provide a framework for performance evaluation and promote communication and coordination among organizations segments Define responsibility centers, facilitate the fixing of blame for missed budget predictions, and ensure goals congruence between superiors and subordinates Foster the planning of operations, provide a framework for performance evaluation, and promote communication and coordination among organization segments