Chapter 10 Budgeting And Control

Question 1

Control systems

Answer 1

Control systems assure that organizational processes are doing what they were intended to do without excessive expenditure of resources.

Question 2

Steps in the control function

Answer 2

The first step is to establish standards for performance. The second step is to run the process and perform work. The third step is to measure the actual performance. The fourth step is to compare actual performance with the standard. Step five is to take corrective action

Question 3

Feed forward Control

Answer 3

Feed forward controls work at the beginning. The targets that are set guide actions throughout the process

Question 4

Concurrent control

Answer 4

Concurrent controls are employed during the process. Critical checkpoints are established for monitoring

Question 5

Feedback controls

Answer 5

Feedback controls are employed at the end of a process for the production cycle. These are used to evaluate the end quality

Question 6

Edward Demmings view on quality

Answer 6

Deming urged ending a focus on mastic inspection and awarding contracts solely on the basis of price, consistency of purpose at the sizing the quality should permeate all that is done, and the company should drive out fear to remove barriers to internal cooperation and other impediments to quality improvement

Question 7

Joseph Juran’s view on quality

Answer 7

juran emphasize three things; first that top management should be in charge instead of teams are workers or inspectors, second extensive training was needed for workers to know about statistical variation and how to use problem-solving tools, and third that change to take place incredibly fast

Question 8

Philip Crosby’s view on quality

Answer 8

Crosbys major contribution was the concept of zero defects. This concept, the elusive, what designed overcome the common view that defects just happened that there is some reasonable level of poor quality

Question 9

Progressive discipline

Answer 9

Progressive discipline is where each step successfully more severe and its consequences

Question 10

Expense center

Answer 10

This is where responsibilities maintain for staying under expense targets

Question 11

Revenue center

Answer 11

Have a new centers establish, within the unit, I said responsibility for generating revenue targets. Sales units are commonly based on revenue budgets.

Question 12

Profit center

Answer 12

Profit centers subtract expenses from revenue and combine the two prior centers into one center

Question 13

Investment center

Answer 13

This is when the capital budget is added to the profit center. Investment centers encourage responsibility center not to spend too much on capital investments this type of sander puts pressure on generating and I’ve added revenue and profit to justify the capital expense

Question 14

Gold displacement

Answer 14

Call displacement occurs when a budget becomes the ultimate goal, not profitability or doing more business

Question 15

Guidelines for effective controls

Answer 15

First building internal control orientation, then be selective and strategic and designing, be flexible allowed budget busting and have contingencies, be understanding and fair in appearance, focus on rewarding NOT PUNISHING, look at the results