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How can responsibility accounting and flexible budgets improve morale?

How can responsibility accounting and flexible budgets improve morale?

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Answer #1


Responsibility accounting is a form of accountability in which the manager or higher level of authority which was made responsible for a certain task is made responsible after the completion of such task. In responsibility accounting the person can be held responsible only for the task he was alloted or for the activity on which they have control.
This boosts their morale as they are now not held responsible for the poor performance or the tasks on which they have no control.


Flexible budget also boosts the morale of employees/managers as it allows managers to alter the budget if for any reason productivity increases, increasing the variable costs. Using flexible budget such increased costs can be explained.

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