Loose Leaf For Managerial Accounting for Managers

6th Edition

ISBN: 9781264445394

Author: Noreen, Eric, BREWER, Peter, Garrison, Ray

Publisher: McGraw Hill

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyz…

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Textbook Question

Chapter P, Problem P.20Q

Planning and Control

Many companies use budgets for three purposes. First, they use them to plan how to deploy resources to best serve customers. Second, they use them to establish challenging goals, or stretch targets, to motivate employees to strive for exceptional results. Third, they use them to evaluate and reward employees.

Assume that you are a sales manager working with your boss to create a sales budget for next year. Once the sales budget is established, it will influence how other departments within the company plan to deploy their resources. For example, the manufacturing manager will plan to produce enough units to meet budgeted unit sales. The sales budget will also be instrumental in determining your pay raise, potential for promotion, and bonus. If actual sales exceed the sales budget, it bodes well for your career. If actual sales are less than budgeted sales, it will diminish your financial compensation and potential for promotion.

Required:

Do you think it would be appropriate for your boss to establish the sales budget without any input from you? Why?
Do you think the company would be comfortable with allowing you to establish the sales budget without any input from your boss? Why?
Assume the company uses its sales budget for only one purposeâ€”planning to deploy resources in a manner that best serves customers. What thoughts would influence your estimate of future sales as well as your boss’s estimate of future sales?
Assume the company uses its sales budget for only one purposeâ€”motivating employees to strive for exceptional results. What thoughts would influence your estimate of future sales as well as your boss’s estimate of future sales?
Assume the company uses its sales budget for only one purposeâ€”to determine your pay raise, potential for promotion, and bonus. What thoughts would influence your estimate of future sales as well as your boss’s estimate of future sales?
Assume the sales budget is used for all three purposes described in questions 3â€”5. Describe any conflicts or complications that might arise when using the sales budget for these three purposes.

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Chapter P, Problem P.19Q

Chapter P, Problem P.1E

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Chapter P Solutions

Loose Leaf For Managerial Accounting for Managers

Ch. P - Prob. P.1Q Ch. P - Pick any major television network and describe...Ch. P - If you had to decide whether to continue making a...Ch. P - Why do companies prepare budgets?Ch. P - Prob. P.5Q Ch. P - Why is managerial accounting relevant to...Ch. P - Prob. P.7Q Ch. P - Why do management accountants need to understand...Ch. P - Prob. P.9Q Ch. P - Pick three industries and describe how the risks...

Ch. P - Pick any large company and explain three ways that...Ch. P - Why do companies that implement Lean Production...Ch. P - Why are leadership skills important to managers?Ch. P - Why are leadership skills important to managers?Ch. P - Prob. P.15Q Ch. P - Prob. P.16Q Ch. P - Prob. P.17Q Ch. P - Why do companies take a physical count of their...Ch. P - Why do companies use sequential prenumbering for...Ch. P - Planning and Control Many companies use budgets...Ch. P - Prob. P.1E Ch. P - Prob. P.2E Ch. P - Ethics and the Manager Richmond, Inc., operates a...Ch. P - Prob. P.4E Ch. P - Prob. P.6E Ch. P - Ethics In Business Consumers and attorney generals...Ch. P - Prob. P.8E Ch. P - Prob. P.9E Ch. P - Corporate Social Responsibility In his book...Ch. P - Prob. P.11E Ch. P - Cognitive Bias and Decision Making During World...Ch. P - Ethics and Decision Making Assume that you just...

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Solution Summary: The author explains how the company would be comfortable with establishing the sales budget.

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