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Sir what is a budget revision?? In bpp kit qu. No. 61(Spike limited) says ,consider budget revision for material and labour spiliting each into 2 parts,in favour of the revision and against the revision..what should i consider making my answers with or against the revision??
I failed to get the solution they presented in the kit.A budget revision is when you effectively re-write the budget.
For the situations outlined in the question, they want to change the budget to include the effect of the higher prices (in one case) or the higher labour costs (in the other case).
The main point of the discussion is that the budgets are being used to measure the performance of the manager – the manager has done well if they do better than budget, and badly if they have done worse.
What is not good it to allow the budget to be changed simply because the manager realises he has done something wrong. If they allow the budget to be changed so that the manager looks to have performed OK, then it removes the point of doing the budget in the first place.
They should only allow the budget to be changed if something has happened that it outside the managers control (and therefore would be not fair to blame the manager for).
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