1 a) \"Budget is an aid to management and not a Substitute for management\". Comment. b) \'Flexible Budgets\' are more, realistic and useful than \' Fixed Budgets\'. Do you agree ? Explain. c) \'Incremental Revenue should be more than \'Incremental Costs\' , to process a product, after split-off point. Explain. d) The imputed costs are nothing but opportunity costs. Explain. Solution 1) a.   Budget is an aid to management because Budget is financial statement but it also includes statement of quantities with or without monetary data. Further, Budget is prepared for a particular period then it prepared in advance, and it is considered to be a plan to attain a specific objective for management. Finally, We can use the Budget as tool not as substitute for management. b)Yes, i agree with that because According to Flexible budget defined by I.C.M.A. U.K. a budget is recognizing difference between fixed, semi fixed, and variable costs, and it is made to change in relation to the level of activities. In additionally, Costs of various levels can be easily obtained by the price fixation and estimation of profit at various levels of activities, so flexible budget made easy for management. But in the case of Fixed budget it is made to retain as well as remain constant in the level of activity, it is ineffective as a tool of cost control, why because once budget is fixed it does not know to internal and external factors urged to change. c)Yes, Incremental revenue should be more than incremental costs, to process a product, after split-off point it is profitable to process the product in the future. It could be decided by the management. d) Implicit cost also called as imputed costs are nothing but opportunity costs it means sacrificing correct alternatives required by the management to take the decision for factors of production. It is opposite to explicit cost. Finally Imputed cost are not reported as a separate cost at the beginning stage. .

1. 1 a) "Budget is an aid to management and not a Substitute for management". Comment.
b) 'Flexible Budgets' are more, realistic and useful than ' Fixed Budgets'. Do you agree ?
Explain.
c) 'Incremental Revenue should be more than 'Incremental Costs' , to process a product, after
split-off point. Explain.
d) The imputed costs are nothing but opportunity costs. Explain.
Solution
1) a.  Budget is an aid to management because Budget is financial statement but it also
includes statement of quantities with or without monetary data. Further, Budget is prepared for a
particular period then it prepared in advance, and it is considered to be a plan to attain a specific
objective for management. Finally, We can use the Budget as tool not as substitute for
management.
b)Yes, i agree with that because According to Flexible budget defined by I.C.M.A. U.K. a budget
is recognizing difference between fixed, semi fixed, and variable costs, and it is made to change
in relation to the level of activities. In additionally, Costs of various levels can be easily obtained
by the price fixation and estimation of profit at various levels of activities, so flexible budget
made easy for management.
But in the case of Fixed budget it is made to retain as well as remain constant in the level of
activity, it is ineffective as a tool of cost control, why because once budget is fixed it does not
know to internal and external factors urged to change.
c)Yes, Incremental revenue should be more than incremental costs, to process a product, after
split-off point it is profitable to process the product in the future. It could be decided by the
management.
d) Implicit cost also called as imputed costs are nothing but opportunity costs it means
sacrificing correct alternatives required by the management to take the decision for factors of
production. It is opposite to explicit cost. Finally Imputed cost are not reported as a separate cost
at the beginning stage.