This comment is given by a small company president : “budgeting is a waste of time.i’ve been running this business for 40 years. I don’t need to plan”discuss.
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This comment is given by a small company president : “budgeting is a waste of time.i’ve been running this business for 40 years. I don’t need to plan”discuss.
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- As a consultant to President James Davis at Red Lake State University, you are assigned to assist in performing a 5% across–the-board cut to reduce the budget deficit. He asks you to write a paragraph narrative as to why a budget cut should be implemented. Please prepare your narrative with a clear justification that is supported with examples.Read the attached article on Zero Based Budgeting at Shell and answer the following questions: 1. The article refers to a “substantial impact” on the company’s cost budget; how significant was the expected reduction? 2. What aspects of the business were “off limits” during this exercise? 3. Describe what YOU think “cost creep” means and how it may arise? 4. How was the program first established? 5. Did the exercise require a lot of resources? 6. What three fundamental questions were asked? 7. The results of the analysis were presented to the company’s leadership. What happened next? 8. The article refers to a “three-step implementation.” What were the three steps? 9. Briefly describe what they assumed to be the “must-have” activity? 10. What categories of “nice to have” activities resulted? 11. What items made their decisions more tough? 12. The article talks about rebalancing the work that is managed in-house and work that is contracted out; provide examples of activities that were…Instrumental LtdVijay Govindarajan and John Shank This case requires the analysis of budgeted versus actual performance for dierent organisational functions and considers strategic versus operational issues. David Jones, president and principal shareholder of Instrumental Ltd, sat at his desk reflecting on the 2018 results (Exhibit 302.1). For the second year in succession the company had exceeded its profit target. David was obviously happy with the year’s results. All the same, he wanted to get a better feel for the relative contributions of the R&D, manufacturing and marketing departments in this overall success. With this in mind, he called his assistant, Jennifer, a recent MBA graduate of the London Business School, into his office. ‘Jennifer,’ he started, ‘as you can see from our recent financial results, we have exceeded our profit target by £622 000. Could you please prepare an analysis showing how much R&D, manufacturing and marketing contributed to this?’ Exhibit…
- The CEO of XYZ company has $1 million to spend to improve the company's operations. Although the money could be used to create another division, a new budget system is needed to track expenses and create responsibility budget reports. Even when the company earns profit, there are no reports to explain the reasons. Make a recommendation for the way the funds should be used. Defend your position.You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor. Depreciation Cost Formula $16,900 $0.14 per machine-hour $38, 300+ $1.30 per machine-hour $0.70 per machine-hour $94,700+ $1.50 per machine-hour $68, 100 Actual Cost in March $ 21,360 $ 56,800 $ 13, 100 $ 124, 100 $ 69,808 During March, the company worked 17,000 machine-hours and produced 11,000 units. The company had originally planned to work 19,000 machine-hours during…A new factory manager was hired for a company that was experiencing slow production rates and lower production volumes than demanded by management. Upon investigation, the manager found that the workers were poorly motivated and not closely supervised. Midway through the quarter, an incentive program was initiated, and cash bonuses were given when workers hit their production targets. Within a short time, production output increased, but th bonuses had to be charged to the direct labor budget. This could produce an A. unfavorable direct materials cost variance B. unfavorable direct labor cost variance OC. unfavorable direct materials efficiency variance OD. unfavorable direct labor efficiency variance
- I could use some help with (a) through (c) (at the bottom) on this. Porter Corporation has just hired Bill Harlow as its new controller. Although Harlow has had little formal accounting training, he professes to be highly experiences, having learned accounting "the hard way" in the field. At the end of his first month's work, Harlow prepared the following performance report: Total Actual Costs Total Budgeted Costs Variances Direct materials $216,630 $237,600 $20,970 F Direct labor 119,340 132,000 12,660 F Variable overhead 63,000 66,000 3,000 Fixed overhead 184,000 184,000 $582,970 $619,600 $36,630 F In his presentation at Porter's month-end management meeting, Harlow indicated that things were going "fantastically." "The figures indicate," he said, "that the firm is beating its budget in all cost categories." This good news made everyone at the meeting happy and furthered Harlow's acceptance as a member of the management team. After the management meeting,…In the previous week, we have discussed planning budgets that are based on standards. How are standards developed and are they only useful for companies that manufacture products or do service type industries utilize standards? Please explain and give examples!Hackshaw Co. was formed three years ago by Glenn Holding. It started as a very small company but began to expand rapidly. With the growth in the company, the owner decided to implement a formal budgetary control process. Glenn Holding provided some data and projections to the company’s Accountant which the Accountant used to prepare the master budget for the company. The master budget was then broken down into departmental budgets. These departmental budgets were distributed to the department managers with a cover letter explaining the new budgeting system and requesting the support of everyone in achieving the targets. Most of the department managers were displeased with the budget. They felt that the targets were not realistically attainable. a. What type of budgeting approach was used? Explain. What are the advantages and the disadvantages of the approach used, Discuss. What approach would you recommend? Why? Using practical illustration from your organization.
- These are True/False questions. ____ 6. If the total unit cost of manufacturing Product Y is currently $36 and the total unit cost after modifying the style is estimated to be $48, the differential cost for this situation is $12. ____ 7. A process whereby the effect of fluctuations in level of activity is built into the budgeting system is referred to as flexible budgeting. ____ 8. In an investment center, the manager has the responsibility and the authority to make decisions that affect not only costs and revenues, but also the plant assets invested in the center. ____ 9. The capital expenditures budget summarizes future plans for acquisition of fixed assets. ____ 10. The process by which management plans, evaluates, and controls long-term investment decisions involving fixed assets is called capital investment analysis.A new accounting intern at Gibson Corporation lost the only copy of this period's master budget. The CFO wants to evaluate performance for this period but needs the master budget to do so. Actual results for the period follow. Sales volume 150,000 units Sales revenue $ 1,008,000 Variable costs Manufacturing 221,760 Marketing and administrative 90,720 Contribution margin $ 695,520 Fixed costs Manufacturing 277,000 Marketing and administrative 153,700 Operating profit $ 264,820 The company planned to produce and sell 120,000 units for $6.00 each. At that volume, the contribution margin would have been $504,000. Variable marketing and administrative costs are budgeted at 10 percent of sales revenue. Manufacturing fixed costs are estimated at $2.40 per unit at the normal volume of 120,000 units. Management notes, "We budget an operating profit of $1.00 per unit at the normal volume." Required: a. Construct…University Inn's most recent monthly expense analysis report revealed significant cost overruns. The manager was asked to explain the deviations. Below is the "budget v. actual" expense report for the month in question. Actual Budget Fire insurance on the hotel building $2,200 $2,000 Towels used in the gym 500 400 Room cleaning supplies 300 200 Flowers for the reception desk 600 800 Staff wages 60,000 55,000 Management salaries 49,500 45,000 Utilities 11,000 10,000 Maintenance 35,000 30,000 Total $159,100 $143,400 The Inn has observed that towels used in the gym, room cleaning supplies, staff wages, and utilities all vary with activity. The other costs are fixed. The university's football team was on a winning streak and numerous alumni were returning to campus in October, resulting in a 90% occupancy rate during the month. The preceding budget was based upon an assumed 60% occupancy rate. Calculate…