ACC 499 Strayer Univeristy Wk 6 Case on Budgeting Report

WEEK 6 ASSIGNMENT – CASE ON BUDGETING

Week 6 Assignment – Case on Budgeting

Overview

You are hired as a new cost accountant to Ciccetti Corporation. The company manager, David, is having a meeting with you in his office. He brought you this budgeted income statement that was completed by the previous cost accountant. David asks you to provide him with a report explaining the statement in clear, straightforward language, and how you plan to handle the annual budget.

Flexible Budget Performance Part 2 Flexible BudgetActivity VariancesPlanning BudgetCustomers served (q)36,000 33,000Revenue ($4.80q)$172,800$14,400 F$158,400Expenses:   Wages and salaries ($36,900 + 1.60q)94,5004,800 U89,700Supplies ($0.90q)32,4002,700 U29,700Insurance ($13,300)13,300013,300Miscellaneous Expense ($6,300 + $0.40q)20,7001,200 U19,500Total expense160,9008,700 U152,200Net operating income$11,900$5,700 F$6,200

Instructions

Write a 2–3 page report in which you:

Explain the budgeted income statement.

Outline how you would create annual budgeted financial statements.

Analyze the difference between a static budget and a flexible budget, including the importance of each.

Evaluate the importance of reading and correctly interpreting budgeted financial statements.

Analyze the accuracy of a business’s budgeting process to help managers make effective decisions.