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Finance & Accounting
Pages 10 (2510 words)
Business Finance: Case Analysis Introduction Charles Ltd has been analysed by financial planners and post analysis the company’s financial managers prepared a budget that showed that there was a significant need to enhance the company’s efficiency on almost all frontiers to ensure that finances were efficiently utilised and the resources were used to the best of their capabilities.
It moves forward to analyse the plan and performs a variance analysis to find out how the budget could be flexed in order to accommodate a better and more acceptable plan in the scenario where huge deviations from the plan existed. It then concludes in suggesting measures to the management by which such behavioural issues in budget acceptance could be addressed and the new plan could be made acceptable throughout the organization (Stede, 2000). Drawbacks of the Budgetary Control System in Practice The budgetary control system analyses the Management Accounting as a Behavioural Process more than simply a financial process. The budgeting process at Charles ltd was not accepted by the departments primarily because of several behavioural issues that can be highlighted from the provided case. The case suggests a great deal of evidence whereby practical implementation of budgets calls for addressing behavioural issues more than making the budget acceptable within the organization. In case of Charles Ltd., the managers found it difficult to make their budgets accepted across departments of the company. After the 3 month period, they found large variances of actual production from planned estimates. ...
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