In Setting Up an Administrative Monitoring System It Is Essential

question 22

Multiple Choice

In setting up an administrative monitoring system it is essential

• A) that the most sophisticated program be used.
• B) that the variables be measured without error.
• C) that the selection of variables to measure does not motivate people to change their behaviors.
• D) that the selection of variables represent the behaviors that are actually important to the purpose of the organization.

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Definitions:

Benefits of Budgeting

Benefits of budgeting include providing a financial framework for decision making, setting financial targets, and monitoring financial performance against those targets.

Production Budget

A forecast of the units that must be produced to meet anticipated sales, used in planning the required production levels.

Rolling Budget

A financial plan that is continually updated by adding a new period (month, quarter, etc.) as the current period concludes, ensuring the budget extends a constant length into the future.

Direct Labor Budget

An estimation of the total amount of labor cost that will be required for production over a specific period.