Exciteco’s Shortcomings of the Budgeting System

Critically discuss key concepts, features, and the importance of cost accounting.

Exciteco lost the prestigious preferred supplier status from their main customer, who was unhappy with G Division’s failure to effectively respond to the additional demand. Penco’s institutional shareholders’ representative, recently appointed to the board, has asked you as a performance management expert for your advice. ‘We need to know whether Exciteco’s budgeting process is appropriate for the business and how this contributed to last year’s poor performance.’ Evaluate the weaknesses in Exciteco’s current budgeting system and whether it is suitable for the environment in which Exciteco operates.