Week 2 Case

Week 2 Case - Oriole Furniture Budgeting Scenario 1 Oriole...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Oriole Furniture Budgeting Scenario 1 Oriole Furniture Budgeting Scenario Jason Silvia ACC 660: Controllership
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Oriole Furniture Budgeting Scenario 2 Abstract Budgeting is one of the most basic and important short term plans of any business. While gathering the details to the plan, individuals should begin their rough plan for the year, and should finalize their plan by the completion of the budgeting phase. While this is a short term plan, a year in the business world can be a long time so plans might need to be adjusted from time to time.
Background image of page 2
Oriole Furniture Budgeting Scenario 3 Oriole Furniture Budgeting Scenario Having a budget is key to every business. It is the beginning to every business plan and should be well thought out from the beginning stages. “A fundamental purpose of business budgeting is to find the most profitable course through which the efforts of the business may be directed in meeting its primary service objective” (Bragg, 2009) When economic times are good, companies tend to lax their budgeting standards. However, as economies naturally come down companies tend to place too much weight into the budget. Oriole furniture has slipped into the situation that many companies have in the past. Oriole Furniture Budgeting Strengths Budgeting requires a mix of current and historical as well as relying on the personnel that have the most direct knowledge in the budgeting areas. This was clearly done under the Bernard Mente’s divisional budget. The production manager clearly sought our rational budgeting figures. Contacting a key material supplier and finding out their budgeted material increase for the coming year. Another wise decision was to use the most current productivity data to base the labor and manufacturing overhead costs for the coming year. Bernard utilized two personnel to come up with the sales estimates. Having the product specialists and a sales force separately budgeting creates the possibility of having differences in opinion. The sales force have the sense of the customer base and recent ordering trends, while the production specialists have the knowledge of turn around time and the quality of the current backlog. This allows the manager to make a decision based off of two different points of view. This can lead to reasonings that the other has not thought of. Oriole Furniture Budgeting Shortfalls
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Oriole Furniture Budgeting Scenario 4 Every budget has an element of uncertainty. In most cases the next year’s budget is formulated three to six months before the budget year begins. The business environment can change drastically in this time. A certain element of this possibility should exist in the budget. There are initial signs in an economy have future declines or surges. These must be closely watched as they impact the overall plan accordingly. Bernard did not do this when selecting the higher of the two sales options. It was not discussed how either of these two options were devised, thus proper research may or may not have happened. These plans should have taken
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 11

Week 2 Case - Oriole Furniture Budgeting Scenario 1 Oriole...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online