Question 1

define:

semi fixed cost: costs which contains both variable and fixed costs. e.g telephone bill, phone line is fixed further calls is variable.

semi variable cost: costs which contains both variable and fixed costs. e.g telephone bill, phone line is fixed further calls is variable. (same answer because I think they are the same)

I think these two are just the same (mixed costs)

Question 2

Explain the relationship between the Production managers budget and the General Managers budget how do they link to managerial.


1. The Production managers budget handles overhead, direct labor, cost of goods etc. there budget is to do with production. The general manager handles administrative budgets and the overall programme budget.

2. Both managers budgets help the business plan for the future.

I dont know how to answer this question because i have never passed by it and its not in my text book

Well... some of the difficulty with managerial accounting is that it is much less rule-based, and vocabulary can be open to debate. That is, the author of one textbook might call something a different name than another textbook. (I've noticed sometimes these things can be by region.)

I have never heard of "semi-fixed" and "semi-variable." I've heard of "mixed cost" which is essentially what you have defined. I could not find those terms in any of the five managerial books I have sitting about. So I googled it. The first hit I got for "semi-fixed" said "see also semivariable," and in the description said, "also called a mixed cost." So I'm assuming they both mean the same as mixed cost.

As for general manager's budget, it's not going to be called that. It might depend on who they are referring to as the "general manager." Since they refer to a "production manager," then I'll assume the general manager is meaning an administrative type person. Administrative management would want a master budget. That includes everything, the sales, the cost of goods sold, the selling & admin expenses, etc. The whole shebang. So the production budget would be linked into the master budget.

"As for general manager's budget, it's not going to be called that. It might depend on who they are referring to as the "general manager." Since they refer to a "production manager," then I'll assume the general manager is meaning an administrative type person. Administrative management would want a master budget. That includes everything, the sales, the cost of goods sold, the selling & admin expenses, etc. The whole shebang. So the production budget would be linked into the master budget."

Wow! I had two options for the question "Explain the relationship between the Production managers budget and the General Managers budget how do they link to managerial." one of the was the one I mentioned before and the other one is extremely similar to yours except for the 'master budget'.

Thank you very much for the advice.

You're welcome.

As for 'master budget' that's one of those terms that might just be different in another book. :-)