Disadvantages in planning operation variance to improve performance.

The.ex-post budget is indeed based on actual results. However, the subjectivity in setting such a budget refers to the process of determining the budgeted amounts before the actual results are known.

The difficulty lies in accurately predicting and estimating the future performance and expenses, which can involve subjective judgments and assumptions.

Once the actual results are known, the ex-post budget can be compared to the actual performance to assess the managers’ performance. However, if the budget was set subjectively or inaccurately, managers whose performance is reported to be poor based on that budget may question its validity as a performance measure

Is this the question that asks
which 2 of the following sentences about the manipulation issues involved in revising budgets are true?

1)The establishment of ex-post budgets is very difficult . Managers whose performance is reported to be poor using such a budget are
unlikely to accept them as performance measures because of the subjectivity in setting such budgets.

2)Frequent demands for budget revisions may result in bias

3)The operational variances do not give a ‘fair’ reflection of the actual results achieved in the actual conditions that existed.

4)The analysis does not help in the standard setting learning process

So the answer is 1 and 2.

Do you understand why 3 and 4 are not correct then that is enough.