The Variances Discussed in Chapter 15 (For Manufacturing Overhead) Are

question 17

Essay

The variances discussed in Chapter 15 (for manufacturing overhead) are all components of a short-term financial control system. These variances are calculated using standard manufacturing costs and flexible budgets. As was argued in the text (both in Chapter 15 and elsewhere) a financial control system is but part of a more comprehensive management accounting and control system.

Required:
1. What are the primary limitations of short-run financial control measures?
2. How can a short-run financial control system be expanded to become a more comprehensive management accounting and control system? Discuss, in at least some detail, how and why you would expand the system to provide management with more useful information.

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Definitions:

Exclusive Jurisdiction

Jurisdiction that exists when a case can be heard only in a particular court, such as a federal court.

Acts of Congress

Legislation enacted by the United States Congress, which becomes law either upon presidential approval or through overriding a presidential veto.

Trial Court

A court in which cases begin and in which questions of fact are examined.

Questions of Fact

Issues in a legal case that are related to the determination of what actually happened, as opposed to questions of law which involve the interpretation of the law.