ACC 561 GSU Accounting Manufacturing Budget Process Case Study

User Generated

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Business Finance

ACC 561

Georgia State University

ACC

Description

This case is designed to evaluate the budget process at a large manufacturing company.

The learning objectives of this case study are as follows:

Use the budget to make decisions.

Identify how budgeting is used by leadership for planning and control. ( budget income statement is attached,please open below)

Discuss ethical considerations in the budget process.

You have just been hired at ABC Manufacturing, and your supervisor has invited you to sit in on today's budget meeting. You are given a copy of the following proposed budget for next year to review. The budget is being used by ABC to plan for next year. Your supervisor tells you right before the meeting, "We always overestimate because the president always makes us cut the budget by 20%, and besides, I really want to go to that conference in Las Vegas next year.” He continued,” I have really worked hard this year and put in a lot of overtime so I deserve it."

Prepare a one- to two-page written report by addressing the following tasks:

Discuss if you think ABC Manufacturing is properly using the budget process to plan for next year's expenses.

Discuss the comment about the president cutting the budget each year in terms of proper leadership and control?

Discuss the ethical issues related to inflating the budget.

Adhere to APA Style when constructing this assignment, including in-text citations and references for all sources that are used. Please note that no abstract is needed.

Unformatted Attachment Preview

ABC MANUFACTURING Budgeted Income Statement || For the Year Ended Dec. 31, 20XX % INCREASE OVER LAST YEAR REVENUE: Sales 700,000 15% COST OF GOODS SOLD: Cost of Goods Sold 420,000 20% GROSS PROFIT 280,000 EXPENSES: Advertising 9,500 20% Cleaning 1,800 20% Insurance 28,000 20% Phone 3,600 20% Rent 24,000 20% Supplies 6,500 20% Taxes 10,000 20% Training/Education 9,800 100% Utilities 8,500 35% Wages 150,000 Total Expenses 251,700 NET INCOME 28,300
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Explanation & Answer

Attached. Please let me know if you have any questions or need revisions.

Running head: ABC MANUFACTURING BUDGETING PROCESS

ABC Manufacturing Budgeting Process
Student's Name
Institutional Affiliation

1

ABC MANUFACTURING BUDGETING PROCESS
2
ABC Manufacturing Budgeting Process
ABC Manufacturing Budget Process
A budget is a tool used in management for planning and controlling scarce resources. It is
a tool used to reflect a Company's objectives and ways the management will employ strategies to
acquire and effectively utilize necessary resources to achieve such goals. Managers use this tool
to plan and control scarce resources to attain the organization's objectives.
The ABC Manufacturing Company made 28 300 net profit based on the given data,
indicating the use of an inefficient budget process regarding the master budget in planning for
the following year's expenses. A master budget defines a projected income statement, financial
budget and reveals the organization's objectives and strategies in achieving them (Campo, 2017).
It gathers, aggregates, and presents accounting information from other business budgets helpful
in predicting future performance. It is...

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