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Briefly Describe the Advantages and Disadvantages of Using Budgeting for Performance

question 148

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Briefly describe the advantages and disadvantages of using budgeting for performance evaluation?


Definitions:

Margin

Net operating income divided by sales.

Turnover

Sales divided by average operating assets.

Manufacturing Cycle Efficiency

A metric that measures the efficiency of the manufacturing process by comparing the value-added production time to the total production time.

Non-value-added Time

Time spent in the production process that does not contribute to the end product's value or quality, often targeted for reduction in lean manufacturing practices.

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