Homework Answers
Responsibility accounting is an underlying concept of accounting performance measurement systems. The basic idea is that large diversified organizations are difficult, if not impossible to manage as a single segment, thus they must be decentralized or separated into manageable parts. A resposibility centre may a Revenue centre, Cost centre , profit centre or an investment centre, The manager's responsibility is connected to the controllabilitty. For example a manager of a cost centre is not responsibile for the revenue and the manager of the profit centre is not responsbile for cost of capital. Responibility accounts attempts to apply the controllability concept produce responsibility reports where each layer of management is held responsible for all subordinate management layers.
Budgets can be used effectively in responsibility accounting, The budget can be provided to the each of the responsibility centres and the actual results can be comparied with the budgets. The variances need to be analysed from the point of view fo the controllability . For this purpose the variances can be categorised in to planning variances and operating variances. If the difference is due to an event that is uncontrollable by the budget holder, it is a planning variance. If the difference is due to an event that is controllable by the budget holder, it is an operational variance.
Traditional budgeting uses last year’s income and expenses as the benchmark for your current year’s income and expenses. You can look at your last year’s budget as a template of sorts, into which you enter your current-year financial data. This will not take exactly the last years figure some incremental or decremental will be made The main disadvantage of the traditional budgeting system is that it does not promote the innovatioon, There will be a lot of changes in the business enviornment and technological innovation might have taken place , These factors are not considered in the traditional budgeting system. .
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Explain what responsibility accounting is and how budgets are used in responsibility accounting. How should the...
explain/reflect on why budgets should be on a standardise format within a specific organisation
explain/reflect on why budgets should be on a standardise format within a specific organisation
What responsibility or role does the accountant have in this process? Cenu li. An effective accounting...
What responsibility or role does the accountant have in this
process?
Cenu li. An effective accounting information system has the ability to sort through the millions of things that happen in a company during an accounting cycle and capture only the business transactions that impact the accounting equation. Questions 1. What responsibility or role does the accountant have in this process? 2. Should information provided by management and other non-accounting personnel be assumed accurate or is it the accountant's responsibility...
Responsibility accounting revolves around the concept that Multiple Choice A. someone has to be made responsible...
Responsibility accounting revolves around the concept that Multiple Choice A. someone has to be made responsible for all costs. B. responsibility for accounting numbers belongs to the accounting department C. each manager’s performance should be judged by how well the manager manages those items directly under his or her control. D. the manager in charge of a particular department should be responsible for all the costs within his or her department.
Problem 22-1A Responsibility accounting performance reports; controllable and budgeted costs LO P1 Billie Whitehorse, the plant...
Problem 22-1A Responsibility accounting performance reports; controllable and budgeted costs LO P1 Billie Whitehorse, the plant manager of Travel Free’s Indiana plant, is responsible for all of that plant’s costs other than her own salary. The plant has two operating departments and one service department. The camper and trailer operating departments manufacture different products and have their own managers. The office department, which Whitehorse also manages, provides services equally to the two operating departments. A budget is prepared for each...
LO3 Explain the use of planning tools used in management accounting P4 Explain the advantages and...
LO3 Explain the use of planning tools used in management accounting P4 Explain the advantages and disadvantages of different types of planning tools used for budgetary control. M3 Analyse the use of different planning tools and their application for preparing and forecasting budgets. D3 Evaluate how planning tools for accounting respond appropriately to solving financial problems to lead organisations to sustainable success.
Explain how the Wells Fargo accounting information system (i.e., components and functions) contributed to the fraud...
Explain how the Wells Fargo accounting information system (i.e., components and functions) contributed to the fraud and / or embezzlement. You will need to focus on how each component / function of the accounting information system failed, which resulted in the scandal / case. Imagine that Wells Fargo uses a third-party accounting system. Evaluate the effectiveness of the firm’s stakeholder in the event that a third-party accounting system suffers a breach. Include an assessment of the level of responsibility of...
1. Explain the responsibility of the accounting department. 2. What is one advantage of having 2...
1. Explain the responsibility of the accounting department. 2. What is one advantage of having 2 costs pools (one for fixed costs and one for variable costs) for each service department?
1. Explain the responsibility of the accounting department. 2. What is one advantage of having 2...
1. Explain the responsibility of the accounting department. 2. What is one advantage of having 2 costs pools (one for fixed costs and one for variable costs) for each service department?
Saved Problem 22-1A Responsibility accounting performance reports; controllable and budgeted costs LO P1 Billie...
Saved Problem 22-1A Responsibility accounting performance reports; controllable and budgeted costs LO P1 Billie Whitehorse, the plant manager of Travel Free's Indiana plant, is responsible for all of that plant's costs other than her own salary. The plant has two operating departments and one service department. The camper and trailer operating departments manufacture different products and have their own managers. The office department, which Whitehorse also manages, provides services equally to the two operating departments. A budget is prepared for...
Problem 22.1A Responsibility accounting performance reports; controllable and budgeted costs LO P1 Billie Whitehorse, the plant...
Problem 22.1A Responsibility accounting performance reports; controllable and budgeted costs LO P1 Billie Whitehorse, the plant manager of Travel Free's Indiane plant is responsible for all of that plant's costs other than her own salary The plant has two operating departments and one service department. The comper and trailer Operating departments manufacture different products and have their own managers. The office department, which Whitehorse also manages provides services equally to the two operating departments. A budget is prepared for each...
What responsibility or role does the accountant have in this
process?
Cenu li. An effective accounting information system has the ability to sort through the millions of things that happen in a company during an accounting cycle and capture only the business transactions that impact the accounting equation. Questions 1. What responsibility or role does the accountant have in this process? 2. Should information provided by management and other non-accounting personnel be assumed accurate or is it the accountant's responsibility...
Saved Problem 22-1A Responsibility accounting performance reports; controllable and budgeted costs LO P1 Billie Whitehorse, the plant manager of Travel Free's Indiana plant, is responsible for all of that plant's costs other than her own salary. The plant has two operating departments and one service department. The camper and trailer operating departments manufacture different products and have their own managers. The office department, which Whitehorse also manages, provides services equally to the two operating departments. A budget is prepared for...
Problem 22.1A Responsibility accounting performance reports; controllable and budgeted costs LO P1 Billie Whitehorse, the plant manager of Travel Free's Indiane plant is responsible for all of that plant's costs other than her own salary The plant has two operating departments and one service department. The comper and trailer Operating departments manufacture different products and have their own managers. The office department, which Whitehorse also manages provides services equally to the two operating departments. A budget is prepared for each...
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