Is ethical to build slack into a budget and explain

Assignment Help Managerial Accounting
Reference no: EM132543080

Ashley Finn is a new production manager. After a great deal of effort, including considerable market research, she completes her budget and submits it to her boss, Keith Payne. Without even looking at it, he asks her what her "fudge factor" was, and which items contained the most slack. Ashley, very surprised, responds that she doesn't use any "fudge factor," and that all her figures are honest. Mr. Payne counters by asking her how she would respond if she had to cut about 20% from her budget, as it is. He tells her that most budgets are trimmed in committee, and she had better be ready. He returns the budget to her, and tells her to come back with something reasonable.

Question 1. Is it ethical to build slack into a budget? Explain.

Question 2. Was it ethical for Mr. Payne to refuse to accept a budget without slack? Briefly explain.

Reference no: EM132543080

Questions Cloud

Prepare a responsibility report for january : The Mixing Department manager,What would be the likely result of management's analysis of the report? Prepare a responsibility report for January 2010.
How much is the total goodwill to be recorded by partnership : Shoe contributes inventory with a fair value of $30,000 and his expertise. How much is the total goodwill to be recorded by partnership
What would be the minimum transfer price : What would be the minimum transfer price they should be willing to accept assuming there would be no impact to their fixed cost
Sample test of hypothesis or analysis of variance : How would you apply the output from either a one-sample or two-sample test of hypothesis or Analysis of Variance (ANOVA) to solve a business problem?
Is ethical to build slack into a budget and explain : Was it ethical for Mr. Payne to refuse to accept a budget without slack? Briefly explain. Is it ethical to build slack into a budget? Explain
What is the price per unit : What is the price per unit after further processing that would make the company indifferent between process further and sell at split-off point
List relevant conclusions from the foxy originals case : How does the information generated by the managerial accounting systems contribute to a better understanding of the decision?
Compute the amount of the dividend and dividend payout ratio : Compute the amount of the dividend (or the amount of new common stock needed) and the dividend payout ratio for each of the three capital expenditure
Compute the minimum total sales revenue : Sireli Company makes and sells a product that regularly sell for $38.95 each. Compute the minimum total sales revenue

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Prepare the companys budgeted income statement

Prepare the company's budgeted income statement using an absorption income statement format as shown in Schedule 9.

  Compute the amount of cash flow associated

The following accounts and corresponding balances were drawn from Teva Company's 2014 and 2013 year end balance sheets:

  What are the creditors total amount on claims on the assets

$4217000, common stock of $1052000, and retained earnings of $698000. What are the creditors' total amount on claims on their assets?

  Give an example of a computer search query

Determine whether your client is required to capitalize fringe benefits and general overhead that is attributable to employees who are building an addition to your client's factory during a "slack time" at work.

  How well disney has managed labour costs

Diane Disney, Explain to the COO, who has been on job, what your analysis shows about how well Disney has managed her labour costs.

  What the flexible budget amounts of fixed and variable costs

$722,500 of variable costs. The flexible budget amounts of fixed and variable costs for 32,000 units are (Do not round intermediate calculations)

  Calculate materials price variance and materials variance

Design your spreadsheet to meet the assignment requirements set out above. In particular, check the spreadsheet requirements and the spreadsheet advice PDF - Distinguish between job costing and process costing.

  What course of action is recommended

If a proposed capital project has an internal rate of return of 10% with a hurdle rate of 11%, what course of action is recommended?

  Explain the type of exploitation or unethical practice

Explain the type of exploitation or unethical practice in advertising that is at play in the ad. Discuss whyr you think this is an unethical or immoral practice

  Describe the value of activity-based customer costing

Describe the value of activity-based customer costing. Explain how activity-based costing can help a firm identify its true low-cost suppliers.

  Warnerwoods company uses a perpetual inventory system it

warnerwoods company uses a perpetual inventory system. it entered into the following purchases and sales transactions

  How well-managed organization usually may budgeting cycle

How Well-managed organization usually may a budgeting cycle that include planning the performance of the organization as a whole

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd