Question

Please help, they are saying my answer is only 1.65/3.3 right and i have no idea what else to put or what else is needed.

Expand Your Critical Thinking 23-03 (Essay) Computer Associates International, Inc., the world's leading business software company, delivers the end-to-end infrastructure to enable e-business through innovative technology, services, and education. Recently, Computer Associates had 19,000 employees worldwide and revenue of over $6 billion. The following information is from the company's annual report. COMPUTER ASSOCIATES INTERNATIONAL, INC. Management Discussion The Company has experienced a pattern of business whereby revenue for its third and fourth fiscal quarters reflects an increase over first- and second-quarter revenue. The Company attributes this increase to clients' increased spending at the end of their calendar year budgetary periods and the culmination of its annual sales plan. Since the Company's costs do not increase proportionately with the third- and fourth-quarters' increase in revenue, the higher revenue in these quarters results in greater profit margins and income. Fourth-quarter profitability is traditionally affected by significant new hirings, training, and education expenditures for the succeeding year. ZYour answer has been saved and sent to the instructor. See Gradebook for score details. Why don't the company's costs increase proportionately as the revenues increase in the third and fourth quarters? THE company's cost doesn't increase proportionately in the fourth quarter because they didn't spend on any significant new info. The hiring, training and education was not as much in the fourth. LINK TO TEXT ZYour answer has been saved and sent to the instructor. See Gradebook for score details. What type of budgeting seems appropriate for the Computer Associates situation? The budgeting that seems appropriate for the computer Associates situation would be comprehensive budgeting. This will provide the most information for everyone involved. This will include of projection of what is to come as well. Click if you would like to Show Work for this question: Open Show Work

Answer 1

Part 1

As the cost behavior is primarily fixed, the costs do not increase proportionately with the revenues increase in the third and fourth quarter.

Part 2

Static budgeting seems to be most appropriate for Computer Associates.

In flexible budgeting the costs respond proportionately with changes in the activity level but in static budget it do not.