Budgeting

Question 1

Planning Variances

Answer 1

Assumptions or standards used in the original budget-setting process not being accurate.

E.g. original budget assumed that SP would increased by 2% but market conditions have meant that SP could only be increased by 1%. That SP variances should be treated as planning variances

Question 2

Operational variances

Answer 2

Difference between revised budget and actual performance.

Result from the decisions of operational managers

Question 2

Environmental Management Accouting (EMA)

Answer 2

Gathering and analysis of both financial and non-financial information to help a business make better decisions about protecting the environment.

Identify environment-related costs and take steps to control them.

Question 3

Conventional costs