LET’S ANALYZE ULOB 1. Explain the importance of human aspect in budgeting and responsibility accounting. The human aspect of budgeting refers to the human factors that are regarded as vital part of budgeting. These human aspects are important since the administration of budgeting requires education, persuasion, and intelligent and interpretation. A successful budgeting brings together the three major pillars: people, data, and process. Furthermore, to ensure the success of responsibility accounting, it is important to look into the human aspect also by considering the needs of subordinates, providing information about control measures and adjusting according to requirements, and develop mutual interest. Therefore, human aspect is important in budgeting and responsibility accounting because human factors are crucial in both aspects. 2. Explain the relationship between responsibility accounting and budgeting in performance management? A responsibility accounting provides information to evaluate each manager on the revenue and expense items over which that manager has primary control. It is fundamental to control because it involves the managers accountable for the performance of their respective units. It is closely associated with budgeting because budgeting involves the allocating of resources to an organization. Also, budgeting highlights benchmarks that are used when appraising a unit managers performance. Thus, budgets coupled with responsibility accounting provide feedback to top management about the performance relative to the budget of different responsibility center managers. Organizational control is the underlying theme of responsibility accounting and budgeting.