Chapter 24 - Budgetary control and responsibility accounting. The objectives of this chapter are: Describe budgetary control and static budget reports, prepare flexible budget reports, apply responsibility accounting to cost and profit centers, evaluate performance in investment centers. | 24-1 24 Budgetary Control and Responsibility Accounting Learning Objectives 24-2 1 Describe budgetary control and static budget reports. 2 Prepare flexible budget reports. 3 Apply responsibility accounting to cost and profit centers. 4 Evaluate performance in investment centers. LEARNING OBJECTIVE 1 Describe budgetary control and static budget reports. The use of budgets in controlling operations is known as budgetary control. 24-3 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 Budgetary Control Budgetary control involves the following activities. Illustration 24-1 24-4 LO 1 Budgetary Control Works best when a company has a formalized reporting system which: 1. Identifies the name of the budget report. 2. States the frequency of the report. 3. Specifies the purpose of the report. 4. Indicates the primary recipient(s) of the report. 24-5 LO .
