Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed



Download 1.72 Mb.
View original pdf
Page130/469
Date01.12.2021
Size1.72 Mb.
#57828
1   ...   126   127   128   129   130   131   132   133   ...   469
solutions-manual-to-bhimani-et-al-management-and-cost-accounting-pearson-2012-1
H&S Engineering
Fixed costs (180/300)
× €80,000
(120/300)
× €80,000 Variable costs 50
× €100 100
× €100
€48,000 5,000

€53,000

€32,000 10,000
€42,000 The advantages were described above
a
Use of a budgeted unit rate for variable costs helps planning by consumers and insulates them from intervening price changes and some inefficiencies.
b
Use of the lump-sum approach for fixed costs prevents the total charges from being affected by the short-run usage of the service department by other consuming departments.
4
Consumers would tend to understate their predictions of long-run usage. Conceivably, if all played the same game, the lump-sum allocations maybe unchanged – although that result is unlikely. Top management copes with these tendencies by monitoring these predictions, following up and using feedback to keep future predictions more reliable. In addition, in some organisations, there are definite rewards in the form of salary increases for managers who demonstrate skills in making accurate predictions and some organisations charge a high price for usage that exceeds a budgeted commitment.


81
© Pearson Education Limited 2012

Download 1.72 Mb.

Share with your friends:
1   ...   126   127   128   129   130   131   132   133   ...   469




The database is protected by copyright ©ininet.org 2024
send message

    Main page