Question: Q1V1 (Please write this version number in your answer sheet) [8 Marks] Kelly Manufacturing is a medium-sized company that manufactures and markets a range of

Q1V1 (Please write this version number in yourQ1V1 (Please write this version number in your

Q1V1 (Please write this version number in your answer sheet) [8 Marks] Kelly Manufacturing is a medium-sized company that manufactures and markets a range of products. The divisions of Kelly Manufacturing include white goods, kitchenware, and outdoor furniture. The manager of each division can determine the activities from purchasing materials to operation and pricing their products. Kelly Manufacturing also includes research and development, after-sales, and logistic department. Required: a. What type of responsibility center is the division of kitchenware likely to be? Provide brief reasons. [2 marks] b. The senior management team includes the managing director, the financial controller, the manufacturing director, and the marketing director. The senior management team determines promotion activities and how to allocate promotion costs to each division. Are costs of promotion activities controllable by division managers? Provide brief reasons. [2 marks] c. The senior management team oversees the budgeting process. The team gives the target sales revenue and target profit to each division manager for the following budget year. Briefly discuss two limitations of top-down budgeting. [2 marks] d. The senior management team realizes the issue with top-down budgeting and decides to change to bottom-up budgeting. Discuss a potential problem arising from bottom-up budgeting. [2 marks]

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