a) Following are the stakeholders involved:-
i) Production team
ii) Engineering team
iii) Accounting team
iv) Corporate team
v) Division controller
b) Following are the ethical issues in this situation:-
1) When should information, such as the new procedures and anticipated cost savings, be communicated upward in an organization?
2) Is it ethical for managers of the division to use information which they have and those in corporate headquarters do not, to their own advantage?
3) Should the managers of a division propose a budget that they think will be easy to achieve? Will this proposed budget motivate managers and other employees?
c) From the given theories, Jennifer should use the "utilitarian" theory in teaching her decision as this theory consider the cost incurred as well as benefits available to division, its managers and its stakeholders. It also helps in deciding which budget gives the overall greatest benefit.
d) Possible alternatives for Jennifer are:-
1) Jennifer could revise the budget, as Ron told her to do.
2) Jennifer could go to Ron’s superior with her arguments that a realistic budget should be prepared.
Answer all questions DOLLLILLIOLI Budgetary Slack Topic: Budgeting/Standard Setting Characters: Jennifer, a cost accountant working in...
Answer all questions DOLLLILLIOLI Budgetary Slack Topic: Budgeting/Standard Setting Characters: Jennifer, a cost accountant working in a manufacturing division of a large corporation Ron, the budgeting and standards supervisor and Jennifer's superior in the accounting department Jennifer has been working on next year's budgets for some of the division's products. After Ron looked over her work, he called her into his office. Ron: "Jennifer, the budgets look pretty good, except that your estimates of materials costs seem too low." Jennifer:...
Answer all questions DOLLLILLIOLI Budgetary Slack Topic: Budgeting/Standard Setting Characters: Jennifer, a cost accountant working in a manufacturing division of a large corporation Ron, the budgeting and standards supervisor and Jennifer's superior in the accounting department Jennifer has been working on next year's budgets for some of the division's products. After Ron looked over her work, he called her into his office. Ron: "Jennifer, the budgets look pretty good, except that your estimates of materials costs seem too low." Jennifer:...
Answer all questions DOLLLILLIOLI Budgetary Slack Topic: Budgeting/Standard Setting Characters: Jennifer, a cost accountant working in a manufacturing division of a large corporation Ron, the budgeting and standards supervisor and Jennifer's superior in the accounting department Jennifer has been working on next year's budgets for some of the division's products. After Ron looked over her work, he called her into his office. Ron: "Jennifer, the budgets look pretty good, except that your estimates of materials costs seem too low." Jennifer:...
Smith Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. Smith allocates overhead based on yards of direct materials. The company's performance report includes the following selected data: (Click the icon to view the selected data.) Read the requirements Requirement 1. Prepare a flexible budget based on the actual number of recliners sold. (Round budget amounts per unit to the nearest cent.) 980 Smith Recliners Flexible Budget Budget Amounts per Unit Actual Units (Recliners) Sales Revenue...
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Budgeting for an Academic Department at a State University: Can You Believe the Numbers? INTRODUCTION You are the senior accounting faculty member in the business school and your dean, Dean Weller, is asking for help. She is very discouraged after a midyear budget meeting with the Vice President of Finance. The college's Department of Social Work has a large budget deficit, and because of this the VP is inclined towards closing the department entirely or closing its bachelor's program. The...
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