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 the plan in terms of persons responsible for achieving them. It is used by the management as a control device to evaluate the performance of executives who are uncharged of various cost centers. Their performance is compared to the targets (budgets), set for them and proper action is taken for adverse results if any. The kinds of responsibility areas depend upon the size and nature of business activities and the organization structure. However responsibility areas may be classified under three broad categories:

Cost centre

Profit centre

Investment centre

Posted Date: 7/8/2013 6:26:01 AM | Location : United States

Ask an Expert

Related Discussions:- What is the responsibility of operating budget, Assignment Help, Ask Question on What is the responsibility of operating budget, Get Answer, Expert's Help, What is the responsibility of operating budget Discussions

Write discussion on What is the responsibility of operating budget
Your posts are moderated

Write your message here..

Related Questions

Return on investment-residual income, Return on Investment and Residual Inc... Return on Investment and Residual Income This is a traditional approach to performance measurement given by: ROI =     Income          Invested Capital               (m

Describe the selling costs and development costs, Describe the Selling cost... Describe the Selling costs and Development costs Selling costs: These are costs of seeking to create and stimulate demand (sometimes termed as marketing) and securing orde

Invoice discounting or factoring, If a company creates sales to a number of... If a company creates sales to a number of customers on credit terms this will have to wait for two or still three months before its debtors pay that they owe. It means that the deb

The break even point in dollorsales for rice company, the break even point ... the break even point in dollorsales for rice company is48,000 and the company's contribution margin ratio is 40 percent. If Rice Company desires a profit of $84,000, how much wou

Rates, What is your base rate for graduate level accounting? If I decide to... What is your base rate for graduate level accounting? If I decide to use your service can the tutor and I speak via skype? I''m not located in the U.S.

Arrival rates-service rates-traffic intensity, Arrival Rates, Service Rates... Arrival Rates, Service Rates, and Traffic Intensity The (average) arrival rate is the rate of arrival of customers at a queue, and is often denoted by x. If 10 customers arr

Motives for holding inventories, MOTIVES FOR HOLDING INVENTORIES If pro... MOTIVES FOR HOLDING INVENTORIES If production and delivery of goods were instantaneous, there would be no need for inventories. However in reality, the manufacturing and purcha

Distinguish between advertising and public relation, Question 1: a. Dis... Question 1: a. Distinguish between Advertising and Public Relation? b. Discuss the methods adopted by a Public Relation company in promoting the image of a destination in th

Multi-collinearity, Multi-collinearity Multiple regression analysis is ... Multi-collinearity Multiple regression analysis is based on the assumption that the independent variables are not correlated with each other, whenever the independent variables

Participative budgets- budgetary styles, Participative Budgets In this ap... Participative Budgets In this approach to budgeting, budgets are developed by lower level managers who then submit them to their superiors. The budgets depend on the lower level