Budget Performance Reports

Question

1. What limits the usefulness to managers of fixed budget performance reports? How can these limits be overcome? 
2. What is the “reserve ratio?”
3. Explain the importance of departmental income statement in an enterprise in which several separate departments function. Provide an example of a departmental income statement in which at least three shared indirect costs are divided according to three different appropriate allocation bases.

250 Words and references

Question

• Use the Internet to research the annual report of at least one (1) merchandising company. Determine which costing method (Last In First Out [LIFO], First In First Out [FIFO], or weighted average cost) that is used to record inventory by your selected company.
• Identify the three (3) primary advantages and three (3) primary disadvantages of using the costing method (LIFO, FIFO, and weighted average) that is used to record inventory.
• Provide support for your response.