250_Notes_8C

250_Notes_8C - ACCT 250 ACCOUNTING FOR DECISION MAKING...

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ACCT 250 – ACCOUNTING FOR DECISION MAKING NOTES – CHAPTER 8C SPRING 2008 SUMMARY Here we examine alternative approaches to budgeting, behavioral issues, and systems. NOTES 1) Alternative approaches Zero based budgeting differs from traditional approaches in that prior period information does not serve as a base for the coming period’s budget o Much more time consuming than traditional approach o Promotes discussion on value-add of each functional area – contentious? Activity-based budgeting is an extension of ABC o Approach budgeting from perspective of activities, tying inputs to outputs o May be less threatening than functional approach for managers Kaizen budgeting builds in assumptions for continuous improvement o Costs must be lowered each year through process improvement o Designed to ensure the firm remains competitive in their market Continuous (rolling) budgets are extended at the end of each month or quarter o Eliminates the “budget season” o Question: Are budget reviews as rigorous when constantly occurring?
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This note was uploaded on 04/18/2008 for the course ACCTG 250 taught by Professor Rabe during the Spring '08 term at Luther.

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250_Notes_8C - ACCT 250 ACCOUNTING FOR DECISION MAKING...

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