Chapter 22 - Budgetary control and responsibility accounting. After reading the material in this chapter, you should be able to: Describe budgetary control and static budget reports, prepare flexible budget reports, apply responsibility accounting to cost and profit centers,. | Replace with 6e Cover Slide Prepared by Coby Harmon University of California, Santa Barbara Westmont College Budgetary Control and Responsibility Accounting Kimmel ● Weygandt ● Kieso Accounting, Sixth Edition 22 Prepare flexible budget reports. CHAPTER OUTLINE Describe budgetary control and static budget reports. 1 2 LEARNING OBJECTIVES Apply responsibility accounting to cost and profit centers. 3 Evaluate performance in investment centers. 4 The use of budgets in controlling operations is known as budgetary control. Takes place by means of budget reports which compare actual results with planned objectives. Provides management with feedback on operations. Budget reports can be prepared as frequently as needed. Management analyzes differences between actual and planned results and determines causes. LO 1 LEARNING OBJECTIVE Describe budgetary control and static budget reports. 1 Budgetary control involves the following activities. ILLUSTRATION 22-1 BUDGETARY CONTROL LO 1 Works best when a company has a formalized reporting system which: Identifies the name of the budget report. States the frequency of the report. Specifies the purpose of the report. Indicates the primary recipient(s) of the report. BUDGETARY CONTROL LO 1 Partial budgetary control system for manufacturing company. ILLUSTRATION 22-2 Budgetary control reporting system BUDGETARY CONTROL LO 1 Budgetary control involves all but one of the following: Modifying future plans. Analyzing differences. Using static budgets. Determining differences between actual and planned results. BUDGETARY CONTROL Question LO 1 A Static budget is a projection of budget data at one level of activity. When used in budgetary control, each budget included in the master budget is considered to be static. Ignores data for different levels of activity. Compares actual results with budget data at the activity level used in the master budget. STATIC BUDGET REPORTS LO 1 Illustration: Budget and actual sales data for the Rightride . | Replace with 6e Cover Slide Prepared by Coby Harmon University of California, Santa Barbara Westmont College Budgetary Control and Responsibility Accounting Kimmel ● Weygandt ● Kieso Accounting, Sixth Edition 22 Prepare flexible budget reports. CHAPTER OUTLINE Describe budgetary control and static budget reports. 1 2 LEARNING OBJECTIVES Apply responsibility accounting to cost and profit centers. 3 Evaluate performance in investment centers. 4 The use of budgets in controlling operations is known as budgetary control. Takes place by means of budget reports which compare actual results with planned objectives. Provides management with feedback on operations. Budget reports can be prepared as frequently as needed. Management analyzes differences between actual and planned results and determines causes. LO 1 LEARNING OBJECTIVE Describe budgetary control and static budget reports. 1 Budgetary control involves the following activities. ILLUSTRATION 22-1 BUDGETARY CONTROL LO 1 Works best .
