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Explain decision unit - zero base budgeting
Decision units: an organization is divided among decision units. The manager of the decision unit justifies the relative budget proposal. Any of the bases may be adopted for dividing the organization among the decision units
The division of organization among its decision unit should be logically links with organizational objectives. Zero base budgeting is a result oriented technique and division of organization among decision units should be in line with its objects.
Transfer pricing with third party consequences Transfer prices are used not only for internal record keeping and performance evaluation purposes. There are several settings
Receivable management is a specialized activity and needs various time and effort on the part of the firm. Collection of receivables frequently poses problems, mainly for small and
Constraints 1) A constraint of the type ≤ (≥) can be converted to an equation by adding a slack variable to (subtracting a surplus variable form) the left side of the constrain
Limitation of break even charts Despite many advantages a break even chart suffers from the following limitations: 1) A break even chart is based upon a number of assumption
Return on Investment and Residual Income This is a traditional approach to performance measurement given by: ROI = Income Invested Capital (m
What is kaizen Kaizen is the Japanese term for continuous improvement. The kaizen concept was pioneered by in Japan by Toyota as daily challenge to all its to improve their pro
Stages in the performance budgeting The stages in the performance budgeting is enumerated as follows: 1) Establishment of goals objectives and policies: data collection revi
Major features of JIT (1) Elimination of non-value added activity: JIT manufacturing can be described as a philosophy of management, dedicate to the elimination of waste. Wa
what is Long term budgets Long term budgets: The budgets are prepared to depict long term planning of the business. The period of long term begets various between five to ten
Question : (a) A company manufactures and sells two products A and B. Presently, it sells 600 units of A and 400 units of B at a price of £24 and £19 respectively. The unit
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