a) Budgets are said to be useful tools for exercising control. Yet budgets are concerned with...

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a) Budgets are said to be useful tools for exercising control. Yet budgets are concerned with plans about the future and control is about managing in the present time. Is there a conflict of timing here? (In other words, is this in conflict with matching principle? (5 marks) b) When comparing projections to actual results, variance analysis is a popular management accounting technique. Research indicates that many UK businesses make decisions on whether to investigate a particular variance on the basis of managerial judgement, presumably on a case-by-case basis. What are the arguments for and against such an approach? (5 marks) c) A company's sales budget may be broken down into a number of subsidiary budgets, for example one for each regional sales manager. The overall sales budget would be a summary of the subsidiary ones. Required: Why might a business have such subsidiary budgets? In other words, what is the value of having subsidiary budgets? (5 marks) d) Most businesses prepare detailed budgets for the forthcoming year. Identify and explain how budgets help managers achieve their goal of wealth maximization for the owners. (5 marks) e) This question has two parts. Firstly, assume that Stanley Accounting Services is a sole proprietorship with a single owner named Maxwell Stanley. What happens to the company when Maxwell Stanley dies? Secondly, assume that Strickland Accounting Services is an incorporated company with a single owner (shareholder) named Maria Strickland. What happens to the company when Marie dies? (5 marks) a) Budgets are said to be useful tools for exercising control. Yet budgets are concerned with plans about the future and control is about managing in the present time. Is there a conflict of timing here? (In other words, is this in conflict with matching principle? (5 marks) b) When comparing projections to actual results, variance analysis is a popular management accounting technique. Research indicates that many UK businesses make decisions on whether to investigate a particular variance on the basis of managerial judgement, presumably on a case-by-case basis. What are the arguments for and against such an approach? (5 marks) c) A company's sales budget may be broken down into a number of subsidiary budgets, for example one for each regional sales manager. The overall sales budget would be a summary of the subsidiary ones. Required: Why might a business have such subsidiary budgets? In other words, what is the value of having subsidiary budgets? (5 marks) d) Most businesses prepare detailed budgets for the forthcoming year. Identify and explain how budgets help managers achieve their goal of wealth maximization for the owners. (5 marks) e) This question has two parts. Firstly, assume that Stanley Accounting Services is a sole proprietorship with a single owner named Maxwell Stanley. What happens to the company when Maxwell Stanley dies? Secondly, assume that Strickland Accounting Services is an incorporated company with a single owner (shareholder) named Maria Strickland. What happens to the company when Marie dies? (5 marks)

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a There is indeed a potential conflict of timing between budgets and control Budgets are futureoriented plans that outline the financial goals and expected expenditures for a specific period They are ... View the full answer