Comparing real and planned outcomes and responding to Divergences from Plan

The final phases in the process outlined in figure shown below of comparing real and planned outcomes and responding to divergences from plan symbolize the firm's control procedure. The managerial function of control includes the measurement, reporting and consequent correction of performance in an attempt to make sure that the firm's objectives and plans are attained. In another words, the objective of the control process is to make sure that the work is completed so as to fulfill the original intentions.

 

To monitor performance, the accountant generates performance reports and represents them to the suitable managers who are responsible for implementing different decisions.  Performance reports including a comparison of actual outcomes (real costs and revenues) and planned outcomes (budgeted costs and revenues) must be issued at regular intervals. Performance reports give feedback information by comparing planned and real outcomes.  These reports must highlight those activities which do not conform to plans, therefore that managers can devote their scarce time to focusing on such items. This procedure represents the application of management by exception. Effective control needs that corrective action is taken and hence actual outcomes conform to planned outcomes.

 

Posted Date: 12/4/2012 6:42:54 AM | Location : United States

Ask an Expert

Related Discussions:- Comparing between real and planned outcomes , Assignment Help, Ask Question on Comparing between real and planned outcomes , Get Answer, Expert's Help, Comparing between real and planned outcomes Discussions

Write discussion on Comparing between real and planned outcomes
Your posts are moderated

Write your message here..

Related Questions

Features of a queue, Features of a queue A calling population – ref... Features of a queue A calling population – refers to the number of potential customers. This number may be considered finite or infinite. An infinite calling population is

Define the modes of hybrid instrument, Define the modes of Hybrid Instrumen... Define the modes of Hybrid Instrument? 1. What are a variety of investment risks. Describe them. 2. Define the modes of Hybrid Instruments and clarify their features.

Lock box system, Lock Box System:   In this type of system, the customers a... Lock Box System:   In this type of system, the customers are advised to mail their payments to a post office box hired through the firm for collection purposes near their region. T

Facets of cash management, Cash management is related along with the manage... Cash management is related along with the management of: Cash outflows and inflows of the firm Cash flows inside the firm Cash balances as financing deficit and inve

What is traditional costing, What is traditional costing In traditiona... What is traditional costing In traditional costing overheads are first related to cost centers (production and service centres) and then to cost object, i.e. production. ABC o

Cash budgeting .., prepare all budgets prepare all budgets

Classification of ratio according to significance, Classification of ratio ... Classification of ratio according to significance   The ratios have also been classified according to their significance. Some ratios are more important than other and the fir

Adjusting entries, what do you debit and what do you credit in adjusting en... what do you debit and what do you credit in adjusting entry for prepaid rent?

Explain the characteristics of cost reduction, Characteristics of cost redu... Characteristics of cost reduction 1) Cost reduction must be real : said through increase in productivity change in product design improvement in technology etc. 2) Cost r

Length of operating or working capital cycle, Change of Technology: Change... Change of Technology: Changes in technology commonly leads to improvements in the efficient processing of raw material, reduce in wastages, more speedy production and higher produ