ACCOUNTING DATA FOR PLANNING, MOTIVATION, AND CONTROL.
The purpose of this paper is to relate the accumulation and presentation of costs and revenues, both historical and projected, to three basic managerial functions: planning, motivation of employees, and control. Two major problems arise in this connection. First, accounting information must be presented according to the management function which it is to assist. Thus the accountant may find himself confronted with the necessity of compiling cost and revenue data in several different classifications. Secondly, the budgeted figures must be set at the level appropriate to each function: expected costs and revenues for planning, desired goals for motivation, and ideals for control. This problem indicates the use of separate budgets for separate purposes. Both of these problems are discussed in this paper in relation to planning, motivation, and control. Each of the three functions of management discussed requires cost and revenue data compiled and presented according to the purpose for which it is to be used. Correspondingly, each function requires budgets set at different levels of costs and revenues. The planning function is served by a coordinated master budget, which is composed of a number of subsidiary budgets, all set at the level of expected results. Incentives to employee performance indicate the use of fragmentary budgets set at the level of short-range goals. Flexible departmental budgets which compare ideal and incurred costs serve the purpose of control.
- DOI
- 10.2308/tar-7098002
- Volume
- 37 (1)
- Pages
- 44-50
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref