...1 Professor W. F. BENTZ Flexible Budgeting: Activity Rates FLEXIBLE BUDGETING Definition:--A flexible budget is a budget that is a function of one or more levels of activity. Thus, the budget depends on one or more measures of activity volume rather than being fixed in amount. Purpose:--The purpose of a flexible budget is to develop an estimate or estimates of cost for one or more levels of activity. Activity levels are typically measured in terms of activity inputs, levels, or outputs. Such a budget is flexible in the sense that it depends upon a specified level of activity volume. Acquisition budgets focus on the costs to be incurred to acquire actual or planned levels of resources. Labor budgets, purchasing plans, and similar budgets are resource acquisition oriented. Activity budgets focus on the resources that should be required to maintain activities at specified levels based on expected or desired levels of efficiency. Production budgets focus on the resources that would be required to produce a specified set of products and services. Like activity budgets, production budgets are necessarily based on assumed levels of efficiency. The idea of a flexible budget is applicable to all three types of budgets. Temporal issues:--Flexible budgets can be used as ex-ante forecasts of total cost for various levels of activity volume. Or they can be used as ex-post standards of the costs that should have been incurred for various levels of activity volume...
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...the budgeting process and primarily focuses on the planning problems with budgeting. The other advocates abandoning the budget and primarily focuses on the performance evaluation problems with budgeting. This paper provides an overview and research perspective on these two recent developments. We discuss why practitioners have become dissatisfied with budgets, describe the two distinct approaches, place them in a research context, suggest insights that may aid the practitioners, and use the practitioner perspectives to identify fruitful areas for research. INTRODUCTION udgeting is the cornerstone of the management control process in nearly all organizations, but despite its widespread use, it is far from perfect.1 Practitioners express concerns about using budgets for planning and performance evaluation. The practitioners argue that budgets impede the allocation of organizational resources to their best uses and encourage myopic decision making and other dysfunctional budget games. They attribute these problems, in part, to traditional budgeting’s financial, top-down, commandand-control orientation as embedded in annual budget planning and performance evaluation processes (e.g., Schmidt 1992; Bunce et al. 1995; Hope and Fraser 1997, 2000, 2003; Wallander 1999; Ekholm and Wallin 2000; Marcino 2000; Jensen 2001). We demonstrate practitioners’ concerns with budgets by...
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...accuracy of our forecasts. Business starts off with a static budget. Static budget is created before the business period. For example, if business period is six months and production estimated 500 units during six months, then 500 units will be used as the basis for the static budget calculation. A flexible budget is prepared after the business period ends. This type of budget shows the business what the static budget should have been by using actual output figures from the budget period. For example, if the static budget covered the production of 500 units, but only 250 units were made, the flexible budget takes only 250 units into account. There are advantages and disadvantages of flexible budgeting. The advantages are: 1) Flexible budgets let us tie spending to sales, and allow us increase spending to take advantage of opportunities presented by revenues. For example, if our sales increase dramatically, a flexible budget lets us increase our advertising or promotions. 2) It’s important to understand our manufacturing and overhead costs in order to know true costs of sales. A flexible budget recalculates production and overhead costs based on sales data or units sold. We can review these numbers each month to determine which of our products provides the best profit margins, and whether it’s effective to keep producing them. 3) A static budget relies on data that is current only at the time the budget is created. Legislative changes can affect our taxes or expenses...
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...Flexible Budget ACC 543 June 20, 2011 Flexible Budget In today’s business, a flexible budget helps plan for the future. This tool compiles expense, revenue, production, and cost data. The data produced from the flexible budget provides an organization with a tool for performance evaluation. This can assist management in determining the most profitable sales and production levels, in addition to determining fixed and variable costs. Examining how the flexible budget relates to fixed and variable costs as well as analyzing the correlation between the static and flexible budget leads to cost-volume-profit analysis. Static and Flexible Budgets Fixed cost, such as manufacturing, is those cost that remain unchanged and stay constant no matter what the volume of activity may be. The variable cost, labor and materials, will vary and is most often determined based on the activity and the market prices for various labor and materials. The flexible budgets provides the what if situations for the company. The budget is also commonly used to determine how effectively a company is planning and performing. Unlike the static budget, the flexible budget provides customers with the actual number rather than the planned activity for the company. In the budget, the fixed cost will remain constant but may change for a couple of reasons. One of the reasons the numbers may be change is because the planned volume may be higher than the actual volume, which would...
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...The flexible budget uses the same selling price and cost assumptions as in a original budget. Variable and fixed costs do not change categories. The variable amounts are recalculated using the actual level of activity, which in the case of the income statement is sales units. The important thing to remember in preparing a flexible budget is that if an amount, cost or revenue, was variable when the original budget was prepared, that amount is still variable and will need to be recalculated when preparing a flexible budget. If, however, the cost was identified as a fixed cost, no changes are made in the budgeted amount when the flexible budget is prepared. It’s important to remember in preparing a flexible budget is that if an amount, cost or revenue, was variable when the original budget was prepared, that amount is still variable and will need to be recalculated when preparing a flexible budget. If cost was identified as a fixed cost, and no changes are made in the budgeted amount when the flexible budget is prepared. Differences may occur in fixed expenses, but they are not related to changes in activity within the relevant range. When preparing budget reports, it is important to include in the report the items the manager can control. If a manager is only responsible for a department's costs, to include all the manufacturing costs or net income for the company would not result in a fair evaluation of the manager's performance. If, however, the manager is the Chief Executive...
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...ACC 206 WEEK 4 DQ 2 FLEXIBLE BUDGETS NEW To purchase this visit here: http://www.nerdypupil.com/product/acc-206-week-4-dq-2-flexible-budgets-new/ Contact us at: nerdypupil@gmail.com ACC 206 WEEK 4 DQ 2 FLEXIBLE BUDGETS NEW Flexible budgets provide different information than static budgets. Discuss some of these differences. Is a flexible budget always better? Are there times when you’d recommend using a static budget over a flexible budget? Guided Response: Review your peers’ posts and respond to at least two of your classmates. Discuss whether you agree or disagree with the uses of a flexible budget and why. Home Work Hour aims to provide quality study notes and tutorials to the students of ACC 206 Week 4 DQ 2 Flexible Budgets New in order to ace their studies. ACC 206 WEEK 4 DQ 2 FLEXIBLE BUDGETS NEW To purchase this visit here: http://www.nerdypupil.com/product/acc-206-week-4-dq-2-flexible-budgets-new/ Contact us at: nerdypupil@gmail.com ACC 206 WEEK 4 DQ 2 FLEXIBLE BUDGETS NEW Flexible budgets provide different information than static budgets. Discuss some of these differences. Is a flexible budget always better? Are there times when you’d recommend using a static budget over a flexible budget? Guided Response: Review your peers’ posts and respond to at least two of your classmates. Discuss whether you agree or disagree with the uses of a flexible budget and why. Home Work Hour aims to provide quality study notes and tutorials to the students...
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...ACC 206 WEEK 4 DQ 2 FLEXIBLE BUDGETS NEW To purchase this visit here: http://www.nerdypupil.com/product/acc-206-week-4-dq-2-flexible-budgets-new/ Contact us at: nerdypupil@gmail.com ACC 206 WEEK 4 DQ 2 FLEXIBLE BUDGETS NEW Flexible budgets provide different information than static budgets. Discuss some of these differences. Is a flexible budget always better? Are there times when you’d recommend using a static budget over a flexible budget? Guided Response: Review your peers’ posts and respond to at least two of your classmates. Discuss whether you agree or disagree with the uses of a flexible budget and why. Home Work Hour aims to provide quality study notes and tutorials to the students of ACC 206 Week 4 DQ 2 Flexible Budgets New in order to ace their studies. ACC 206 WEEK 4 DQ 2 FLEXIBLE BUDGETS NEW To purchase this visit here: http://www.nerdypupil.com/product/acc-206-week-4-dq-2-flexible-budgets-new/ Contact us at: nerdypupil@gmail.com ACC 206 WEEK 4 DQ 2 FLEXIBLE BUDGETS NEW Flexible budgets provide different information than static budgets. Discuss some of these differences. Is a flexible budget always better? Are there times when you’d recommend using a static budget over a flexible budget? Guided Response: Review your peers’ posts and respond to at least two of your classmates. Discuss whether you agree or disagree with the uses of a flexible budget and why. Home Work Hour aims to provide quality study notes and tutorials to the students...
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...Master and Flexible Budgets ACC/543 January 28, 2013 Thomas Benscoter MEMORANDOM Date: January 28, 2012 To. Guillermo Furniture Company From: Ashley Lee, Ebony De La Torre, Janelle Durham, Misha Cross ------------------------------------------------- Re: Master and Flexible Budgets Guillermo Furniture: Master and Flexible Budgets A master budget can be a communication tool in which the company’s employees can perceive how their hard work affects the company’s goals. The budget is an outline of a company's plans that sets detailed goals for an organization regarding sales, production, distribution, and financing. This tool can also reveal if employees are meeting their goals set forth by the company in the budget and make corrections to employees. The following memorandum on Guillermo Furniture Store includes a master budget. The explanation of the relationship between fixed and variable cost used in the budget will occur. The difference between static and flexible budgets and how a flexible budget lends itself to a cost-volume profit analysis will be discussed. Fixed and Variable Costs Fixed costs in a budget remain constant even when volumes fluctuate. Fixed costs...
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...Business Communication Trends Michelle Gordon XCOM/285 August 11, 2013 Shannon Owens Business Communication Trends The definition of business communication is the sharing of information between people within an enterprise that is performed for the commercial benefit of the organization. In addition, business communication can also refer to how a company shares information to promote its product or services to potential consumers. (WebFinance, 2013) Communication plays a critical role in student’s on-line day to day activities. A on-line student has to be flexible to balance school and family. Some of the flexibility options allow you to work anytime and anywhere. You are able to make your own schedule and incorporate it into your daily routine. The University of Phoenix requires you to participate four days a week. This means you have to log into your student portal at least four days and participate in class discussions and weekly discussion questions. If for some reason you could not participate you are required to check in with your instructor. Checking in will ensure you will not be dropped from your class. An on-line student is capable of meeting personal needs because you are able to go to school from anywhere. All you need is an Internet connection and a computer. You can take your on-line classes on vacation with you if needed. You can juggle so many personal tasks as an on-line student. For example, if you have a doctor’s appointment and need to answer some...
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...Flexible Work Schedule Survey Kasey Taylor LeTourneau University BUSI 4623OL: Business Research Methods October 25, 2012 Abstract The purpose of this survey was to determine whether or not flexible work schedules have a positive impact on productivity in the workplace. The survey was given to all employees at the end of a training class and turned into the instructor to give to the human resource department. The written survey consisted of 10 questions ranging from demographics to personal needs. We found employees with spouses and or children under the age of 18 were in favor of flexible work schedule having a positive impact for them personally on their productivity. The survey also revealed the need for individuals to feel they have some control and flexibility in their work schedules, which leads to a balanced personal and business life. Flexible Work Schedule The purpose of this survey was to determine whether or not flexible work schedules have a positive impact on productivity in the workplace. “Flexible work schedules” refer to choices pertaining to the location and/or time that work is conducted, whether it is formal or informal. Formal being policy from HR department that is written. Informal meaning the immediate supervisor has approved this flexible arrangement. The survey was emailed to 2,000 employees and 526 participants completed the survey. The survey consisted of several questions ranging from the use of flexible work arrangements to their level...
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...RECOMMENDATION #1. Improve the demand forecasts made internally by the Buying Committee in November just before Speculative Production. Instead of using just a simple average of the individual forecasts made by Laura, Carolyn, Greg, Wendy, Tom, & Wally, use a weighted average, with the weights reflecting past accuracy. RECOMMENDATION #2. Obtain market feedback earlier than Las Vegas, thereby converting some Speculative Production to Reactive Production. Sport Obermeyer can invite selected retailers to come in January to Aspen for an all-expenses-paid “Early Order Weekend”, where there is time for a”sneak preview” of the new line, some recreational skiing and socializing, and then the early placement of orders at a discount. To maximize the value of the market feedback, Sport Obermeyer’s “guest list” should include both large and small retailers and both urban and resort retailers. RECOMMENDATION #3. Decrease lead times for both raw materials and finished goods, thereby allowing more time to utilize existing capacity. Since the business strategy should emphasize Dependability more than Cost, lead-times can be reduced using some or all of the following methods: Choose suppliers of raw materials more on the basis of D than C. Expedite orders through information sharing with suppliers. Expedite shipments using faster (but more expensive) shippers. Establish some local (but more expensive) production capacity for “last minute” production. Other ways to reduce lead times...
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...Have you ever felt that I need to train no matter what I feel like today? I have found that sticking with my training plan is not the issue, however veering off it slightly and allowing for flexibility was very difficult for me. In my last two years of competing against Runners and Triathletes there have been a few injuries, chronic fatigue and potential burnout. I decided to step back this year while training for the marathon by preventing myself in falling in the same pattern again. Often times, the best barometer of feedback is not in watts, heart data or fancy graphs. Some of the best feedback comes from our gut instincts. Finding the joy in training and being opening up to being more flexible in our regimen is just as important as all the hard interval work or getting in the volume. This said, I decided to listen to my inner voice which said, “I think I need to rest more today.” That inner voice often sent me an SOS signal calling for either a brief physical or mental break. The best advice that I can give to you as a runner is to speak to yourself as if you were your own best friend. What would you say to a good friend if she or he felt pressure to so something on plan, but knew deep inside what they really needed? What would you say to your friend if he or she said that she was really, really tired and not up for doing something you had planned together? You’d probably say that “it’s okay – we’ll get it in another time.” The best runners, who perform well...
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...Employers and Workers The pace of life dictates ever changing priorities and requires acceptance, tolerance and flexibility. While a source of income is still required, the company where one is employed may not have as much influence if the career detracts significantly from the non-work related needs of the individual. Furthermore, if companies are insensitive to employee needs, and work becomes a significant source of stress, not only does worker productivity lessen but that company’s name and reputation as an employer may hinder its own ability attract necessary quality employees. Employees and employers alike are looking for ways to increase worker satisfaction. One increasingly attractive solution is the growing acceptance of a flexible work week and schedule. Prominent employers like Kraft Foods, Texas Instruments and First Tennessee Bank have implemented these changes for their workers to boost productivity while increasing job satisfaction (Forbes). Employers are also using these flex schedules as a way of attracting and retaining their employees. For example, “In 1999 only 18 companies on Fortune magazine’s list of Best Places to Work offered telecommuting. Today, 79 do (ABC News).” The definition of flexibility encompasses a wide range of topics such as: • Flextime (compressed work weeks and shift flexibility) • Telecommuting • Paid Time Off (personal days and vacation by the hour) “Business leaders are learning how to position flexibility as a powerful...
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...Daft explains that because these type companies are divided into departments, communication and coordination are slow and decision making may be poor (2013). 2. Another structure is the divisional approach. As opposed to the functional way, there are several teams across the same level that works on their own single product or service. Each of these teams has their own leader or manager. Pros of the divisional approach allow teams to be more focused on their own product or service. This allows them to be flexible and more reactive to changes (Daft, 2013. P. 320). Cons of this structure include higher overhead since it takes more employees to make up the teams and there may be a rivalry between teams due to competition. 3. The matrix is a combination of both functional and divisional (Daft, 2013 p. 321). There may be multiple higher leaders that manage different teams. These leaders report to higher supervisors. The matrix can be very effective since it can be flexible in a rapidly changing world. Teams work better together and have broader responsibilities. The downside to a matrix approach is that it may be more difficult to manage. This approach is very much decentralized, not hierarchical like the others. 4. Recent...
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...Assessment Activity BSBWOR501A Manage personal work priorities and professional development Assessment 76 Student ID: Question # Question Type: Assignment Name: Duration/Due: 1 week Marks 1 10 SKILLS THAT WEREN’T EVEN INVENTED A FEW YEARS AGO ARE ESSENTIAL FOR THE NEAR FUTURE By looking at new positions that are emerging in the workplace, supervisors can get some idea of some of the skills they will have to develop in the future. There are three areas that seem to be emerging in a way that will have a major impact on the workplace: information, etiquette and life-work balance. Information is coming at us at an increasing rate. We have now stepped into what is known as the knowledge age, where information (converted to knowledge) is what will provide the competitive edge for organisations. Information and knowledge are fast replacing capital equipment as the key asset for conducting business. Administrative assistants will become information co-ordinators, managing the vast amounts of information to ensure that everyone has access to and is aware of the existence of information that will help them better perform their jobs. The supervisor will also have to manage larger amounts of information, ensuring their staff have access to information that is important to their job. Life-balance is a term appearing in more and more magazines and management books. Many workers have been thrust into the position of caring for ageing parents while also caring for their...
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