In your opinion, is it appropriate for the management of any company to operate without a specific plan and instead react to circumstances, or should management have a specific plan with expected results in the form of a budget?

Could management use the vertical and horizontal methods to compare actual performance to the budget in addition to industry averages over a period of time?



Answer :

Final answer:

The public works director's budget construction method, flexible budgeting for the snow plowing department, and variance analysis offer valuable insights into managing costs effectively.


Explanation:

The method used by the public works director to construct the budget involved analyzing past costs and setting budgets based on prior years' data.

Flexible budget for the snow plowing department allows for adjustments based on actual expenses, providing a more accurate view of performance.

Variances in budgeted expenses versus actual expenses provide insights into areas where costs may have deviated from expectations.


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