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Controlling

T. S. Alemán 36 fichas

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  1. 1What is simultaneous planning?- Budget Planning for all involved departments is carried out simultaneously
    - High demand on IT System
    - Requires more intelligent software
  2. 2What is Sequential planning?- Planning starts with the bottlenack department (often sales)
    - Other plans are derrived from initial plan
    - Many interactions needed
  3. 3What is Budgeting in general?- Setup of a monetary plan which declares (cost) values for the planning period per responsibility area within the company, to which the responsible parties are bound within strict borders.
  4. 4Functions or Roles of Budgeting- Planning, Decision Making
    - Communication
    - Coordination
    - Motivation
    - Monitoring / Control
  5. 5What is the Top Down Budgeting Approach?- Top Management sets companies target.
    - Low input of mid management and employees
  6. 6What is the Bottom-Up Budgeting Approach?- Involves all department in budgeting process.
    - Managers to cleary identify and define anticipated projects and expenditures
  7. 7What is Blended Budgeting?- Mix of Top-Down and Bottom-up
    - Used by approx. 80% of companies
  8. 8Advantages of Bottom-Up Budgeting?- Increased motivation due to Budget Ownership
    - Better information, since employees are more familiar with budget
    - Increases Managers understanding and commitment
    - Better communication between departments
    - Senior Managers can concentrate on Strategy
  9. 9Disadvantages of Bottom-Up Budgeting?- Senior Managers my resent loss of control
    - Dysfunctional behaviour (Budget not in line with corporate objectives)
    - Bad decisions from inexperienced managers
    - Budget preparation is slow
    - Budgetary slack: Managers set targets that are too easy to achieve
  10. 10Typical Steps in a Budgeting Process?1. Setting Objectives
    2. Analysing Resources
    3. Negotiating operational requirements (only bottom-up)
    4. Coordinating Resources
    5. Obtaining Approval
    6. Distributing Budgets
  11. 11Criticism regarding classical Budgeting?- time consuming
    - little value add
    - developed and updated infrequently
    - based on assumptions and guesswork
    - concentrate on cost reduction
    - Busy Season
    - makes people undervalued
  12. 12What are the 4 Alternative Budgeting Types?- Overhead Value Analysis
    - Zero-Based Budgeting
    - Better and Advanced Budgeting
    - Beyond Budgeting
  13. 13Goal of Overhead Value Analysis?- Cost Reduction based on exact analysis of value and costs of all services from the examined overhead sectors
  14. 14Basic Idea of Overhead Value Analysis?- Every operative Service has to undergo a cost-value analysis by the recipient.
  15. 15Phases of Overhead Value Analysis?- Preparation Phase
    - Analysis Phase
    - Realisation Phase
  16. 16Advantages of Overhead Value Analysis?- Cost Savings (10% - 20%)
    - Relatively small time exposure
    - Only basic qualification requirements
    - Raised Motivation in the Examination units through application of own ideas
  17. 17Disadvantages of Overhead Values Analysis?- High overall effort in the analysis team
    - Possible unwillingness due to job security concerns
    - No defined process orientation
  18. 18What is the Objective of Zero Based Bugeting?- Cost Reduction
    - Budget Redistribution
    - Every Budget needs to be justified
  19. 19Basis of Zero Based Budgeting- Planning, Analysis and Decision Technique with the goal to decrease cost, while implementing all available sources in an economic way
    - All Activites are up for negotiation, therefor they have to be justified
  20. 20Steps of Zero Based Budgeting1. Preparation
    2. Decision Units and Sub-Objectives
    3. Performance Level
    4. Decicsion Packages
    5. Ranking of Decision Packages
    6. Budget Cut
    7. Monitoring and Analysing Variances
  21. 21Advantages of Zero Based Budgeting- Evaluation of Activities, Processes and Programmes
    - Elimination of inefficient processes
    - Optimal application of scarce ressources
    - Implemntation of comprehensive efficiency
  22. 22Disadvantages of Zero Based Budgeting- Relatively high effort
    - Temporal Limit of ZBB does not do justice to the dynamic development of overheads
    - Ranking of decision packages could be problematic
  23. 23Criticism to Zero Based Budgeting- Orientation towards classical organisational structures
    - As "one-time-project" not suitable for continual supervision
  24. 24What is better Budgeting?- Stepwise Improvement of Budgeting
    - Stronger Market orientation instead of updating past data
    - More automation in budgeting process through advanced IT Solutions
  25. 25What is Advanced Bugeting?- Stepwise reduction of budgeting processes
    - Relative instead of absolute targets
    - stronger focus on strategic aspects
    - less detailed, more room for self-empowerment
  26. 26Goal of Beyond Budgeting?- Provide a flexible planning and supervising concept
    - Waiving of traditional budgets
  27. 27Criticism to Beyond Budgeting?- Intangible
    - No Starting Points within the Scope of Cost Management
    - Very Company specific
  28. 28What are the 3 Effects of Activity Based Costing?- Allocation Effect
    - Degression Effect
    - Complexity Effect
  29. 29What is the Allocation Effect?- Overheads are allocated to the individual products via the required process quantities according to the strain on operational resources.
  30. 30What is the Complextiy Effect?- Products with low complexity and little added value can be offered cheaper compared to the surcharge calculation.
    - Special products become more expensive
  31. 31What is the Degression Effect?- Small Orders are only charged with minor overheads.
    - It is possible to calculate minimum orders with process costs
    - High batch size leads to decreasing production unit costs
  32. 32Goals of Activity Based Costing?- Monitoring of efficiency of resource application
    - Determination of profitable sales and production programmes
    - Rectification of faults in traditional overhead calculation and absorption costing
  33. 33Principles of Activity Based Costing?- Analysis and Settlement of Overheads Occuring in indirect service areas
    - Enabling long-term oriented cost calculation and cost control
    - Application of activity based accounting additional to traditional costing
  34. 34Examples of Cost Driver (ABC)?- Processing Offers
    - Storing Material
    - Check supplier bills
    - Managing departments
  35. 35Criticism to ABC?- Short Term Monitoring impossible
    - Effects will be seen in long term only
    - Proportionality between cost incurrence and cost causation is limited
    - ABC cannot be used for short-term decision making
    - Valuable Insights for the expenditire and allocation of resources
  36. 36—

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Fichas sobre Controlling, creado por T. S. el 07/05/2020.
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T. S.
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