The chief financial officer (CFO) discussed your analysis and strategy with the executive team and feels that you are the perfect person to work on the corporate budget. Based on the current external environment, the organization has limited resources, and each department has been asked to reduce costs. Based on your experience, answer the following questions: What type of costs should the departments reduce first and why? How can the organization prevent budgetary slack in the budgeting process since the bonuses of managers are tied to the budget? What are some potential ethical issues all organizations deal with in the budgeting process? What are some ways of dealing with these potential problems?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Assignment Details
The chief financial officer (CFO) discussed your analysis and strategy with the executive team and feels that you are the perfect person to work on the corporate budget. Based on the current external environment, the organization has limited resources, and each department has been asked to reduce costs. Based on your experience, answer the following questions:
- What type of costs should the departments reduce first and why?
- How can the organization prevent budgetary slack in the budgeting process since the bonuses of managers are tied to the budget?
What are some potential ethical issues all organizations deal with in the budgeting process? What are some ways of dealing with these potential problems?
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