chapter 10

chapter 10 - John Rubinetti AC 12 3/31/08 Chapter 10...

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John Rubinetti AC 12 3/31/08 Chapter 10 Questions 12, 15, 18 12. Management by exception is the review of budget reports by top management focused entirely on differences between actual results and planned objectives. This approach enables top management to focus on problem areas. To determine what will and won’t be investigated top management uses item guidelines such as materiality and controllability. The controllability of the item has more restrictive exception guidelines for controllable items, because managers cannot control all the items. With materiality managers set a percentage difference from the budget which will then be investigated if the budget deviates from the desired budget either by exceeding or falling short. 15. All costs and revenues are controlled at some level of responsibility within a company. In responsibility accounting the issue is whether the cost or revenue is controlled at the level of responsibility it’s associated with. A controllable cost is a cost over which a manager
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This note was uploaded on 04/29/2008 for the course AC 12 taught by Professor Caster during the Spring '08 term at Fairfield.

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