Incremental budgeting , Managerial Accounting

Incremental budgeting

This is used to describe an incremental cost approach to budgeting where the next period budget is based on the current year’s results plus an extra amount (an increment) for estimated growth or inflation next period.

Incremental budgeting is sufficient only if current operations are effective, efficient and economical without an alternative course of action available to the organization. Although incremental budgeting is easy to prepare, it encourages slacks and wasteful spending to creep into budgets and become a normal feature of actual spending. It does not encourage performance to be improved or looking for alternative ways of carrying out the production.

Posted Date: 12/7/2012 8:11:55 AM | Location : United States







Related Discussions:- Incremental budgeting , Assignment Help, Ask Question on Incremental budgeting , Get Answer, Expert's Help, Incremental budgeting Discussions

Write discussion on Incremental budgeting
Your posts are moderated
Related Questions
Private sector companies have multiple stakeholders who are likely to have divergent interests.( five stakeholder groups and  discuss their financial and other objectives).

Stages of the suggestion system 1) Encouragement : in the first stage management should make every effort to help the workers provide suggestion no matter how primitive for th

What is the Responsibility of operating budget when the operating budget of a firm is constructed in terms of responsibility areas it is called the responsibility budget shows

Select the cost driver(s): This might also be termed to as independent, explanatory or predictor variable. A cost driver can be stated as any factor whose change causes a chang

what is the computation procedure of accounting rate of return?

7 feed from control to planning It is realized these days more than even before that management control is primarily a human activity which should focus on how to help individu

THE GAMES ECONOMISTS PLAY It sounds like a sports fan's dream.  In Stockholm on October 11th, three men share a $1m prize for their skill at analyzing games. They are not telev

Cash budget is a detailed budget of income and cash expenditure including both capital and revenue items. For control reasons the year's budget is usually phased in smaller periods

Disadvantages of ratio analysis 1) False results: ratios are based upon the financial statement. In case financial ratio is incorrect or the data upon which ratios are based