Final answer:
To prepare a cost statement for XYZ Ltd, components such as the original budget, flexed budget, and actual results are crucial. Behavior issues during the budgeting process, like lack of accountability, overemphasis on short-term goals, inaccurate forecasting, and challenges in resource allocation, can impact the process's efficacy.
Step-by-step explanation:
Cost Statement: Original Budget, Flexed Budget, and Actual Results
To prepare a cost statement showing the original budget, flexed budget, and actual results for XYZ Ltd in May 2020, we need to understand each component:
Original Budget: This reflects the initial budgetary allocations before the start of the period, based on forecasts and planning.
Flexed Budget: This is adjusted to actual levels of activity during the period and serves as a more realistic benchmark for actual results.
Actual Results: These are the real financial figures realized at the end of the period.
Without actual figures, we can't compute a precise cost statement, but the relationship between these three components is crucial for budget analysis and variance analysis.
Behavior Issues in Annual Budgeting Process
During the annual budgeting process, several behavior issues may arise:
- Lack of accountability: Without clear responsibility, budget targets may not be taken seriously.
- Overemphasis on short-term goals: This can lead to neglecting long-term planning and investment.
- Inaccurate forecasting: Over-optimistic or pessimistic forecasts can skew the budget.
- Efficient resource allocation: Ensuring resources are allocated where they can be most productive can be challenging.
Each of these issues can adversely affect the efficiency and outcomes of the budgeting process.