• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

Incremental Budgets

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Incremental Budgets

  • This topic has 5 replies, 2 voices, and was last updated 12 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • May 30, 2013 at 6:16 pm #127872
    diannel2012
    Member
    • Topics: 18
    • Replies: 37
    • ☆☆

    Hi sir just a little clarification regarding incremental budget

    Every year your supposed to Increase it to a certain percentage or by the inflation rate… Do we ever decrease certain components if we wish to cut cost??? … Can we do that in an Incremental Budget?

    May 30, 2013 at 8:15 pm #127893
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54670
    • ☆☆☆☆☆

    Oh yes 🙂

    With incremental you take last years figures and adjust for two things – one is inflation (or deflation, although that is obviously less likely), but the other is for changes in the level of activity. So, if you budget on producing more next year, then of course you will need to increase all the variable cost budgets. However, if you are budgeting on producing less next year, then (for this factor) you would decrease all the variable cost budgets.

    In addition, there is no reason why you should not decrease the budget if you feel that you will be able to cut costs in some way (although for numbers in the exam, it is less likely that you would have this information).

    May 31, 2013 at 4:28 am #127933
    diannel2012
    Member
    • Topics: 18
    • Replies: 37
    • ☆☆

    perfect thank u so much 🙂

    but since we can decrease our variable cost .. why does the budget Encourages Slack?…..is that due to poor planning?
    Slack is not using all the resources available right?…

    May 31, 2013 at 7:43 pm #128031
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54670
    • ☆☆☆☆☆

    Slack in this context is budgeting for more than we actually need to spend.

    The problem is that with incremental budgeting it is common to just adjust for inflation and changes in volume, but not to consider the possibility of being more efficient and therefore to budget to spend less.

    June 1, 2013 at 6:00 am #128074
    diannel2012
    Member
    • Topics: 18
    • Replies: 37
    • ☆☆

    perfect ur the best
    thank u so much sir 🙂

    June 1, 2013 at 4:56 pm #128125
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54670
    • ☆☆☆☆☆

    Thank you 🙂

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • John Moffat on The Statement of Financial Position – ACCA Financial Accounting (FA) lectures
  • Bainamura on The Statement of Financial Position – ACCA Financial Accounting (FA) lectures
  • kadamova.f@gmail.com on Associates (IAS 28) – PUPs – ACCA Financial Reporting (FR)
  • kadamova.f@gmail.com on Associates (IAS 28) – PUPs – ACCA Financial Reporting (FR)
  • bpop on Risk and uncertainty (part 2) – ACCA (AFM) lectures

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in