The Task BF Co manufactures and sells leather goods including, footwear, briefcases, handbags and luggage. Each year it produces b

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The Task BF Co manufactures and sells leather goods including, footwear, briefcases, handbags and luggage. Each year it produces budgets on an incremental basis.

The Task BF Co manufactures and sells leather goods including, footwear, briefcases, handbags and luggage. Each year it produces budgets on an incremental basis. Detailed budgets for sales, materials and labour are always generated and, if appropriate, the departmental managers are allowed to revise their budgets for planning errors. Quite often, several budget revisions are made to the extent that the final budget bears no resemblance to the original numbers. Variance analyses undertaken always seem to produce favourable operational variances but lower overall profits than the original estimates. The management team is also considering a re-structuring exercise as they feel that there are many people who “who don’t seem to do much