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ACCA F2
Management Accounting (MA)
管理会计
ACCA Lecturer: Belinda Qiu
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Part C Project appraisal
1. Relevant/irrelevant cost
2. Interest rate
3. Discount factor( cost of capital)
4. PV ( annuity, perpetuity)
5. NPV (calculation, adv. & disadv.)
6. Payback period (calculation, adv. & disadv.)
7. Discounted Payback period (calculation, adv. & disadv.)
8. IRR (calculation, adv. & disadv.)
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Part C Behavioral aspects of budgeting
1. Problems during the budgeting process
2. Two types of budgeting setting (adv. & disadv.)
3. Target setting
4. Incentive scheme
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Part C Behavioral aspects of budgeting
1. Introduction
1. 1 Why we need to analyse behavioral aspects? (problem)
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Part C Behavioral aspects of budgeting
1.2 results
Four kinds:
-poor attitudes when setting budgets
-poor attitudes when putting plan into action
-poor attitudes when controlling
-motivator but also demotivator
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Part C Behavioral aspects of budgeting
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Part C Behavioral aspects of budgeting
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Part C Behavioral aspects of budgeting
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Part C Behavioral aspects of budgeting
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Part C Behavioral aspects of budgeting
2. Participation in budgeting process
2.1 two ways to set a budget
2.1.1 imposed style of budgeting ( top-down budgeting )
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Part C Behavioral aspects of budgeting
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Part C Behavioral aspects of budgeting
2.1.2 participative style of budgeting ( Bottom-up budgeting )
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Part C Behavioral aspects of budgeting
3. Target setting
-Targets will assist motivation and appraisal if they are at the right level.
Not too difficult, as this will demotivate staff, not to easy, as managers
are unlikely to strive for optimal performance.
-An ideal target should be slightly above the anticipated performance
level.
-Targets should be :
communication in advance;
dependent on factors controllable by the individual ;
based on quantifiable factors;
linked to appropriate rewards and penalties;
chosen carefully to ensure goal congruence
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Part C Behavioral aspects of budgeting
-When we consider the motivating effect of budget, we should
remember that the budgets have a limited motivational effect. It is the
reward structure that is linked to achieving the budgeted target, or
lack of reward for non-achievement, which provides the real underlyin
g motivation potential of budgets. The rewards need not to be directly
financial but could be in terms of future prospective of promotion.
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Part C Behavioral aspects of budgeting
4. Incentive schemes
The characteristics of a good employee reward system are as follows:
-fairness
-motivational
-understandable
-constantly applied
-objective
-universal
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Part C Behavioral aspects of budgeting
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Part C Behavioral aspects of budgeting
Q1. Which of the following statements about imposed budgets are
correct?
(1)Imposed budgets are likely to set realistic targets because senior
management have the best idea of what is achievable in each part
of the business
(2) Imposed budgets can be less effective than budgets set on a
participative basis, because it is difficult for an individual to be mot
ivated to achieve targets set by someone else
(3) Imposed budgets are generally quicker to prepare and finalise
than participative budgets.
A. 12 C. 23
B. 13 D. 3
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Part C Behavioral aspects of budgeting
Q2. The following relate to the participation of junior management in
setting budgets:
1. It speedster up the setting of budgets .
2. It increases the motivation of junior managers.
3. It reduces the level of budget padding
Which are true?
A. 1
B. 2
C. 23
D. 123
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Part C Behavioral aspects of budgeting
Q3. Which two of the following are mostly likely to influence the
motivation of budget holders?
1. The contents of budget manual
2. The extent of participation in budgeting setting
3. The level of difficulty at which budgets are set
4. The structure of the budget committee
A. 12
B. 23
C. 34
D. 14
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