Question

Read the following scenario: 
Pretorious Manufacturing has just hired a new controller, Diana Metcalf. During her first week on the job, Diana was asked to establish a budget for operating expenses in 2014. Since Diana was not yet familiar with the operations of Pretorious Manufacturing, she decided to budget these expenses using the same procedures as the prior controller. Therefore, in order to establish a budget for operating expenses, Diana started with actual operating expenses incurred in 2013 and added 4.3 percent. Diana based this percentage on inflation as measured by the consumer price index. 
Comment on the effectiveness of Diana’s budgeting strategy. Be sure to use concepts and principles from the text. 
 minimum of 250 words

Answer 1

Answer: Operating budget: - This is nothing but the estimated operating income and Expenses of a business in a Current year. And this will demonst state the operating efficiency of the businey en forms of increasing operating cost. Operating Expense budgets This is nothing but the post of the operating budget. and it is demonstrate the estimated operating cost which is likely to be incurred by the Company in the next month. etc... These expenses are nothing but the strent, pay soll, rates and marketing etc...

became Comments : In this Diana od should take the Post data and set the base and add the 4.3% inflation effect. but this is not sufficient to makes Coreet asumption's for operating System Expenses in future the operating Expenses budget is not soo effective and in this we can take other parameters like labow availability, and unExpected incoreasing rent's, increase in insurance Pemium and the avilability of saw meterial, and Company's Espansion or refaechment etc... These are the some factors which we can take in consideration.