Inman, Inc., is a manufacturer of a single product and is starting to develop a budget for the coming year. Because cost of goods manufactured is the biggest item, Inman's senior management is reviewing how costs are calculated. In addition, senior management wants to develop a budgeting system that motivates managers and other workers to work toward the corporate goals. Inman has incurred the following costs to make 100,000 units during the month of September.

Materials	$400,000
Direct labor	100,000
Variable manufacturing overhead	20,000
Variable selling and administrative costs	80,000
Fixed manufacturing overhead	200,000
Fixed selling and administrative costs	300,000

Inman, Inc.'s September 1 inventory consisted of 10,000 units valued at $72,000 using absorption costing. Total fixed costs and variable costs per unit have not changed during the past few months. In September, Inman sold 106,000 units at $12 per unit.

Essay Questions

1. Identify and explain one method the top managers can take to restrict the Production Manager from taking advantage of budgetary slack.

the professor responded to the answer that was provided and wants it revised.

Hi Anne-Marie, that is very detailed and thorough, but I don't think you would be able to remember that all to respond to an essay question. Also, it does not refer to anything in the fact pattern. I would take another look and if you would like to repost something shorter, that uses some of the amounts from above.

Answer rating: 100% (QA)

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