The following report consists of an analysis of the company budget, identification of key variances and findings, and suggestions on operational changes. A description of the budget process will be presented to pinpoint variances and their causes. Based on these variances, operational changes will be suggested and explained while considering business ethics. Recommendations on particular component production as well as nonfinancial performance measures will be made and accompanied by supporting evidence. First, the following is a brief overview of the budget and budget process. Budgets are an indicator of the costs and revenues linked to each of the companies activities and a way of providing information and supporting mangement …show more content…
There are associated ethical considerations to several of the recommended changes. Strengthening the interview and hiring process will help to eliminate the hiring of unqualified candidates whose only experience with the work is through a personal connection with existing employees. This will help to ensure that candidates with the proper qualifications are placed in positions that are currently experiencing inefficiences. Reevaluating the material suppliers could potentially eliminate any improper compensation between current management and the supplier and reduce the acceptance of inferior materials. Increasing the proper storage of accepted material will not only elimate the waste of improperly stored materials, but also reduces the risk management threat of theft by employees. These are the ethical considerations of several of the recommended changes. Upon deciding whether to make or buy products, the company must consider several items. Management must exam the company’s variable cost compared to the costs associated with buying, as well as any fixed costs that would arise due to purchasing rather than making (Nobles et. al., 2014). Management must also consider what the company would do with the freed up manufacturing capacity (Nobles et. al., 2014). The quality of products being bought must be considered, especially since the company will not be able to personally supervise the production of bought products. While making this
“Make” or to “Buy” will influence the efficiencies of operation in a positive manner. The main reason behind it is that, the make or buy decisions are helpful to sustain business practices, and to improve efficiency in operations in an effective manner.
The budget analysis shows that the labor hours of the firm are higher than the budgeted amount. As such, the firm needs to evaluate the cost benefit analysis of making or buying their products. To make this decision, various factors need to be considered. Before making the decision, Peyton needs to evaluate the marginal costs and revenue of making versus buying the products. The firm should take the option which provides the highest marginal profit which is the
15. What are your thoughts of the importance of understanding the per patient day (PPD)
This research paper is a brief discussion of budget management analysis. Budgeting is the key to financial management, and is the key to translates an organization goals or plan into money. Budgeting is a rough estimate of how much a company will need to get their work done, and provides the basis for evaluating performance, a source of motivation, coordinating business activities, a tool for management communication and instructions to employees. Without a budget an organization would be like a driver, driving blinded without instructions or any sense of direction, that’s how important a budget is to every organization and individual likewise (Clark, 2005).
Breakfast =$3, Gas+ $24, Lunch= $8, Pharmacy expenses = $12, Dinner +$10. Total = $67
A budget is an instrument used to help managers ensure that the resources used effectively and proficiently toward the goals of an organization. A budget projection can be made on a yearly base depending on previous year or existing one. They can further be broken down quarterly or monthly depending on it use. Generating a budget is complex undertaking, and for a budget to be effective the organization ought to follow it strictly. However, no matter how closely a business follows their guidelines there will always be some form of variances. The organization should expect a few variances and be able to work these discrepancies in any budget
The federal budget is a vital part of every country because the future spending totally depends on the number of money earned by the country during the year. The governments create a special commission that is obliged to form a well-established government, with the fair distribution of money. The National Priorities Project (NPP) is a unique non-profit organization that presents the budget system to ordinary citizens and makes it fully transparent and accessible, so everyone who wants can see where do the government collect money, and the spend it during the fiscal year.
The budgeted income statement, cash flows, and balance sheet follow in order. The income budget relies on the revenue and expense forecast from the operating budget, while the budget cash flows are planned for financial and investment activities. A final component of the budget process, the projected balance statement, can be used to tie in all the budgeting dependencies. Once a budget has been prepared, evaluation can be expected before approval. Budgetary components may require several iterations before finalizing the organizational budget.
Budgeting is the systematic method of allocating financial, physical, and human resources to achieve an organization’s strategic goals. Budgets are utilized by for-profit and non-profit organizations to monitor the progress towards the goals, assist in the control of spending, and help predict cash flow for the organization.
Budget is the major financial and economic statement. The role of the budget is to keep track of the money coming in and the money going out. It is essential part of running any business effectively. It can help make a short and long term projections about financial situation, avert a financial crisis and plan for major financial changes.
Budgeting is crucial in the well-being of a company especially the financial health status of a company. In fact, no professionally managed firm would fail to budget, since the budget establishes what is authorized, how to plan for purchasing contracts and hiring, and indicates how much financing is needed to support planned activity. It is routine for a company to budget for its expenses. Expense budgets act as a guideline of how much revenue a company would require keeping the activities running. It is used to set the company’s targets for a certain period.
Feb 25, 2011 sales tax decrease of .25% impacts reduced revenue, reduced operating appropriations, and higher economic spending
For this piece of assignment, a cash budget will be made for Doomy Corporation for the second quarter of the year. For this budget, all the sales figures for the second quarter and some of the expenditure have been given. Hence, to prepare a cash budget, the sales figure given will be used and some calculations will be worked out in order to fully prepare an outstanding budget for Doomy Corporation the following information will be used efficiently.
A budget is a financial statement which is an estimate of income and expenditure of a set period of time, which may include planned revenues, expenses, assets, liabilities and
Budget and budgetary control practices are undeniably indispensable as organizations routinely go about their business activities and operations. These organizations are constantly on the alert on how actual levels of performance agree with planned or budgeted performance. A budget expresses a plan in monetary terms. It is prepared and approved prior to a particular budgeted period and explicitly may show the income, expenditure and the capital to be employed by organizations in achieving their goals and objectives.