Unit 15 help!!!

yvmilne

Hiya any chance someone can help with below question?

What action can management take when admin costs (actual) are higher than budget?

Thnks! I don't quite understand exactly what they mean?

Rachey

Is that their way of asking you about under or overabsorption rates? I havent used this in the workplace though, its just what my tutor has told me a while ago. Management can also review for the purpose of decision making for the next financial year. Hope this helps as the question was quite vague. Good luck!!! :-)

David 1989

This is vague! Maybe they want a 'high level' answer along the lines of:

Management needs to find out why there is a difference - was the estimate unreasonably low, and if not then what factors have raised the admin. costs?

The action management can take is to reduce the amount admin is spending by getting to the root of the reasons for the overspend - is it uncontrolled extra spending, or is admin reacting to unforseen events?

:thumbup1: