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JCT 2
Task 1
Heidi Dyer

A.
The following files have been submitted as attachments:
· Fourth Quarter Cumulative Balanced Scorecard
· Income Statements for the 4 quarters
· Balance Sheets for the 4 quarters
B.
1. A budget is an itemization of estimated or known expenses for a given time period. Pro-forma Statements are forecasted income statements, statements of cash flow, and balance sheets for the following term. They are based on expected revenues and costs. It is a good idea to pay close attention to the figures in these statements, although they are not based on fact, they do provide helpful advice if used in conjunction with previous quarter financials and the allocated budget. The budget and pro-forma statements are used to plan production costs. I tried to keep costs at a minimum for the first and second quarter planning. I opened only 2 offices, advertised sparsely, and hired a minimum of sales people. However I underestimated sales and though I had cash left for the next terms, I did not have enough inventories to cover the demand. For the third quarter I spent more than I had previously and squandered a great deal of the capital I had built up from the second quarter, suffering a significant financial loss. I did not pay attention to the pro-forma statements and did not think about the budget. My lack of planning showed at the end of that quarter and I learned a valuable lesson. If this had been a real company and not just a simulation, I would probably have been unemployed by the end of that period. For the final quarter I looked back at the expenses from the previous quarters and set a limit on spending by not developing any new products and stopping production on the two products that were least successful. By cutting those costs I was able to spend more on advertising and hired more sales people. I cut expenses almost in half

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