Tài liệu Môn Managerial Accounting | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

lOMoAR cPSD| 58605085
VIETNAM NATIONAL UNIVERSITY - HO CHI MINH CITY
INTERNATIONAL UNIVERSITY SCHOOL OF BUSINESS GROUP ASSIGNMENT
Subject: Managerial Accounting
Lecturer: Vũ Tuấn Anh No. Member’s name Student ID 1 Nguyễn Hải Linh BAFNIU20484 2 Trần Trịnh Minh Trang BAFNIU20446 Table of Contents
1. CASE 1: PARTICIPATIVE VERSUS IMPOSED BUDGETING.............................
a. Behavioral Implications............................................................................................
b. Communications' Function...................................................................................... lOMoAR cPSD| 58605085
2. CASE 2: MANAGERIAL PERFORMANCE EVALUATION....................................
a. The segment information prepared for public reporting purposes are not
appropriate for the evaluation of segment management
performance........................
b. The potential behavioral effects of the segment managers.....................................
c. More suitable types of financial information.............................................................
CASE 1: PARTICIPATIVE VERSUS IMPOSED BUDGETING
a. Behavioral Implications:
Budgeting is very important technique for any organization or establishment.
Setting objectives and benchmarks for an organization or business, then
comparing the outcomes to the standards to find any gaps and realign the
targets is a crucial part of budgeting.
• Behavioral Implications of Imposed Budgeting : A imposed
budgeting strategy has an authoritative feel to it. Strategic goals are
included into the budget by senior management as part of the top-down
management methodology. The ability to influence decisions is
improved. When incentives are given to employees depending on how
well they perform in comparison to the budget, this tendency is more
prominent. However, since the top management informs the middle and
lower management of the plans, it appears that there is more dictation
going on than conversation. Employees may feel inactive, dull & their
performance was not upto mark.
• Behavioral Implications of Participative Budgeting : In case of a
participatory budgeting method, the top management is informed of the
perspective from the lower levels. Budgets need not be created using
historical data, instead, estimates that the area managers are more
knowledgeable about might be included as inputs. Budget decisions lOMoAR cPSD| 58605085
would be well-informed thanks to this expertise. However, there is a
chance that the financial process may not give the strategic goals top
priority. This type of budgeting creates a sense of responsibility among
employees. This type of budgeting helps the top management in finding
out the the problems faced by the bottom level employees & also
employees can understand their top level managers in handling various
problems. In participatory budgeting the employees set their goals & try harder to meet them.
Therefore, creating a budget is crucial for the development & efficient
functioning of the business. Managers should understand their role in
budgeting regardless of whether it is enforced or participatory so that it may be
a valuable tool for planning and regulating.
b. Communications' Function
The variations between intelligence flows in these two budgetary approaches. Imposed Bugeting
Participative Budgeting The communication is topdown
A participatory budget, as its
and hardly qualifies as such in name suggests, allows for
the event of an enforced fiscal bottom-up dialogue. Here, the strategy. management is informed from
It takes the shape of authority, a lower level perspective. with the top management
This strategy takes longer than setting the plans and budget
an authoritative budget since it
while the middle and lower level involves many more people management adheres to than the top-down approach,
their established procedures and which only involves senior
works within the allocated budget. management.
The behavioral connotations associated with the intelligence process for
each of the budgetary approaches lOMoAR cPSD| 58605085 Imposed Bugeting
Participative Budgeting
If a budgeted approach is enforced, The employees feel empowered and
there is a good probability that the engaged when they participate in the employees will feel
ignored, budget process. This strategy works
disgruntled, and uninspired. At the best when the area manager has the
lowest levels, the rigid budgets most reliable information. It raises
proposed might not be properly staff morale and motivates them to adhered to. work harder to fulfill their
expectations, which promises more efforts for overall progress.
CASE 2: MANAGERIAL PERFORMANCE EVALUATION
a. Why the segment information prepared for public reporting purposes
may not be appropriate for the evaluation of segment management performance ?
Due to the following factors, segment information provided for public reporting
purposes may not be suitable for assessing segment management performance.
• For the purposes of public reporting, an assignment of general costs
established for the benefit of more than one segment must be taken into consideration.
• The allocation of common expenses is frequently arbitrary.
• The segments chosen for use in public reporting could not accurately
reflect the management accountabilities.
• This information is unable to distinguish between a segment that is badly
invested and a manager's performance under challenging circumstances.
b. The possible behavioral impact of Bubba Gump Corporation's segment
managers if their performance is evaluated on the basis of the
information in the annual financial report. lOMoAR cPSD| 58605085
The segment managers of Bubba Gump Corporation may be perplexed if the
information in the annual financial statement is used to evaluate their
performance because they will be held responsible for an income figure that
includes costs that are arbitrarily assigned to general expenses and costs
that are traceable to but uncontrollable. This method of performance
evaluation will not satisfy. Managers will be motivated to search for work
elsewhere by this unhappiness.
c. Severa l types of financial information that would be more appropriate
for Forrest to review when evaluating the performance of segment managers.
Despite employing the segment as required by legislation designed for public
financial reporting, Bubba Gump Corporation should give responsibility
centers that correspond to the manager's real duties.
The coordinative policy, which separates costs by behavior and only allocates
costs to segments if they are controllable by the segment, should be used to
keep all reports. The report should include the contribution margin, the
segment managers' controllable contribution, and the contribution of each
segment following the allocation of shared expenses. THE END