Rainbow Inc. recently appointed Margaret Joyce as vice president of finance and asked her to design...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Rainbow Inc. recently appointed Margaret Joyce as vice president of finance and asked her to design a new budgeting system. Joyce has changed to a monthly budgeting system by dividing the company's annual budget by twelve. Joyce then prepared monthly budgets for each department and asked the managers to submit monthly reports comparing actual to budget. A sample monthly report for Department A is shown below. Rainbow Inc. Monthly Report for Department A Actual 1,000 Budget 900 Variance 100F Units Variable production costs Direct material Direct labor $2,800 4,800 4,250 $2,700 4,500 $100U 300U Variable factory overhead Fixed costs 4,050 200U Depreciation 3,000 1,000 1,500 1,100 1,000 2,700 300U Таxes 900 100U Insurance 1,350 150U Administration 990 110U Marketing 900 100U Total costs $19.450 $18.090 $1.360U This monthly budget has been imposed from the top and will create behavior problems. All of the following are causes of such problems except a. the use of a flexible budget rather than a fixed budget. b. top management authoritarian attitude toward the budget process. c. the inclusion of non-controllable costs such as depreciation. d. the lack of consideration for factors such as seasonality. Rainbow Inc. recently appointed Margaret Joyce as vice president of finance and asked her to design a new budgeting system. Joyce has changed to a monthly budgeting system by dividing the company's annual budget by twelve. Joyce then prepared monthly budgets for each department and asked the managers to submit monthly reports comparing actual to budget. A sample monthly report for Department A is shown below. Rainbow Inc. Monthly Report for Department A Actual 1,000 Budget 900 Variance 100F Units Variable production costs Direct material Direct labor $2,800 4,800 4,250 $2,700 4,500 $100U 300U Variable factory overhead Fixed costs 4,050 200U Depreciation 3,000 1,000 1,500 1,100 1,000 2,700 300U Таxes 900 100U Insurance 1,350 150U Administration 990 110U Marketing 900 100U Total costs $19.450 $18.090 $1.360U This monthly budget has been imposed from the top and will create behavior problems. All of the following are causes of such problems except a. the use of a flexible budget rather than a fixed budget. b. top management authoritarian attitude toward the budget process. c. the inclusion of non-controllable costs such as depreciation. d. the lack of consideration for factors such as seasonality.
Expert Answer:
Answer rating: 100% (QA)
All of the following are causes of such problems except a the use of a flexible budget ... View the full answer
Related Book For
International Financial Management
ISBN: 978-0132162760
2nd edition
Authors: Geert Bekaert, Robert J. Hodrick
Posted Date:
Students also viewed these accounting questions
-
Following your retirement as senior vice president of finance for a large company, you joined the board of Cayman Grand Cruises, Inc. You serve on the compensation committee and help set the bonuses...
-
The following statement was made by the vice president of finance of Haberman Inc.: "The managers of a company should use the same information as the shareholders of the firm. When managers use the...
-
Following your retirement as senior vice president of finance for a large company, you joined the board of Cayman Grand Cruises, Inc. You serve on the compensation committee and help set the bonuses...
-
Express the quantity of 3.225 kJ in calories.
-
Williams and Park Accounting Practice is considering investing in a new computer system that costs $9,000 and would reduce processing costs by $2,000 a year for the next six years. Required Calculate...
-
Prove the given statement about subsets A and B of R n , or provide the required example in R 2 . A proof for an exercise may use results from earlier exercises (as well as theorems already available...
-
By considering the rotational equilibrium of a fluid mass element, show that \(\tau_{x y}=\tau_{y x}\).
-
THE LEGAL ENVIRONMENT DIMENSION Why did the appellate court dismiss 607 South Parks argument that 02 Development should be required to prove that it had funding commitments for $ 8.7 million? THE...
-
7.) 3 pts. Write the RegExp that matches only the complete HEX number of length 3 or 6. Each number should be in its own line. Some good examples are: #1f1f1F, #AFAFAF, #1AFFal, # 222fff, #F00 But...
-
Cybernetronics Inc. (Cyber) is a Canadian-owned public company which designs and manufactures communications and control systems. The company's year end is May 31. It is now June 2018. You, CPA, are...
-
Create the own scenario which raises moral dilemmas for conflict of interest between an employer and their employee who are both clients of the same firm. This discussion post should provide a...
-
How long is the Inception phase can be?
-
What happens in inception?
-
What are the likely activities and artifacts in inception?
-
List the drawbacks of structured approach.
-
What is Elaboration?
-
Companies collect a wide variety of information about their foreign markets to decide in which countries to conduct business and which market segments in these markets they should target. What are...
-
The senior management at Davis Watercraft would like to determine if it is possible to improve firm profitability by changing their existing product mix. Currently, the product mix is determined by...
-
How is a documentary credit created, and what are its advantages to exporters and importers?
-
What are three political risk factors?
-
Euroshipping Corporation maintains separate production and distribution facilities in Sweden, France, Spain, and Italy. The corporate headquarters is in France. As a consultant to the treasurer of...
-
Determine the probability mass function of \(X\) from the following cumulative distribution function: \[ F(x)=\left\{\begin{array}{lr} 0 & x. \] Figure 3.3 displays a plot of \(F(x)\). From the plot,...
-
The probability that a wafer contains a large particle of contamination is 0.01. If it is assumed that the wafers are independent, what is the probability that exactly 125 wafers need to be analyzed...
-
Two new product designs are to be compared on the basis of revenue potential. Marketing believes that the revenue from design A can be predicted quite accurately to be \(\$ 3\) million. The revenue...
Study smarter with the SolutionInn App