Question

In: Accounting

Please consider the following scenario: What are your thoughts on the situation? When should information, such...

Please consider the following scenario: What are your thoughts on the situation? When should information, such as new procedures and associated cost savings be communicated in an organization? Which form of the budget is accurate? Are they obligated to be accurate? Is anything wrong with this approach?

Scenario:

Characters: Jennifer, a cost accountant working in a manufacturing division of a large corporation Ron, the budgeting and standards supervisor and Jennifer’s superior in the accounting department Jennifer has been working on next year’s budgets for some of the division’s products. After Ron looked over her work, he called her into his office. Ron: “Jennifer, the budgets look pretty good, except that your estimates of materials costs seem too low.” Jennifer: “I checked with production and engineering people, and they told me they expect materials costs to be down. They are trying some new procedures which are almost certain to reduce materials waste and damage significantly.” Ron: “It’s too soon to know how much materials costs will drop, or even if they will be lower. I want you to redo the budget with materials costs about where they have been for this year. Then if materials costs are lower next year, the division will beat the budget and look good. There may be some good bonuses next year.” Jennifer: “Using the current materials quantities puts slack into the budget for next year.” Ron: “Most managers try to get some slack into budgets. There’s nothing wrong with that. Since the new procedures are still experimental, they haven’t been reported to corporate headquarters. This is a perfect opportunity to get an easy budget. I know that’s what the division controller expects and wants. Get the revisions to me as soon as you can.”

Solutions

Expert Solution


Related Solutions

When managers analyze an economic situation of a country what general attributes should they consider?
When managers analyze an economic situation of a country what general attributes should they consider?
Respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and...
Respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and use research to reinforce your ideas. Over lunch, you and Mary meet to discuss next steps with the expansion project. “Do we have everything we need on sales and costs?” you ask. ”It must be time to compute the net present value (NPV) and internal rate of return (IRR) of the Apix expansion project.” “We have the data from James and Luke regarding projected...
You will describe a situation that needs some attention. Tell what are your thoughts, feeling and...
You will describe a situation that needs some attention. Tell what are your thoughts, feeling and choices toward the situation Tell what happen in the situation. Answer the following questions. * What were your thoughts and feelings at the beginning of the situation? * What were your thoughts and feelings as the situation developed and when the situation ended? * Was this a right now situation or you could think about it? If it was right now how did you...
What are your thoughts regarding governmental control over monopolies? Should or should they not be allowed?...
What are your thoughts regarding governmental control over monopolies? Should or should they not be allowed? In competitive markets, we often face hyper-competition. What are some of the pros and cons of hyper-competitive markets v. those that face less competition? Please answer with a detailed response.
what are your thoughts on the idea of " designer babies " ? ( please use...
what are your thoughts on the idea of " designer babies " ? ( please use citations id like to see )
What are your thoughts on the ACA as a plan to provide health benefits? Should it...
What are your thoughts on the ACA as a plan to provide health benefits? Should it be repealed? Is it helping people? Is it affordable? Most importantly, how does this heath care plan compare to other countries? Are there changes you would recommend after what you have learned so far in this course?
•What are your thoughts on legalization of marijuana? Why or why not? •What are your thoughts...
•What are your thoughts on legalization of marijuana? Why or why not? •What are your thoughts on legalization of ALL drugs? Why or why not? •As someone with a child with a medical condition that can be successfully treated with marijuana, I am frequently asked if that has changed my views on legalization. Do YOU think your thoughts would change if marijuana or another illegal substance was found to successfully treat your condition or the condition of a loved one?...
What are your thoughts about the growing influence of computers and information technology (IT) in the...
What are your thoughts about the growing influence of computers and information technology (IT) in the healthcare system? Do you feel that patients' privacy is protected enough, or do you feel that it is too easy for patients' confidential health information to be stolen? Explain your response.
What are your thoughts and opinans on Constitutional Law? thesummary should be at minimum 10...
What are your thoughts and opinans on Constitutional Law? the summary should be at minimum 10 sentences.
. What are your thoughts on whether a facility should only worry about complying with the...
. What are your thoughts on whether a facility should only worry about complying with the OSHA regulations or go beyond compliance and use the stricter requirements of either OSHA regulations or other guidelines? Please include any personal experiences you might have.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT