Answered step by step
Verified Expert Solution
Question
1 Approved Answer
m y sales volume of Shugart Corporation varies from 7,000 units penses along with the related cash res Ise of a year. Management is currently
m y sales volume of Shugart Corporation varies from 7,000 units penses along with the related cash res Ise of a year. Management is currently studying anticipated selling ex- elated cash resources that will be needed. Which type of budget (flexible or static) (1) should be used by Shugart in planning, and (2) will provide Shugart the best feedbac in performance reports for comparing planne e reports for comparing planned expenditures with actual amounts? When Shugart's CEO asks you why it is advantageous to us savantageous to use a flexible budget instead of a static budget, what is one example you could give him? UK11-2. Ethics Case CJ Corporation manufactures steel rebar for use in construction. The accounting start is currently preparing next year's budget. Bob Johnson is new to the firm and is interested in leam- ing how this process occurs. He has lunch with the sales manager and the production manager to discuss further the planning process. Over the course of lunch, Bob discovers that the sales manager adjusts sales projections between a flexible amount and a static amount based on which will reflect the lowest variance from actual results. The production manager does the same for cost estimates. Both managers' year-end bonus is determined based on how low of a variance is achieved. When Bob asks about why they adjust their projections between flexible and static budgets, the response is simply that everyone around here does it. Required a. What do the sales and production managers hope to accomplish by their methods? b. c. How might this backfire and work against them? Are the actions of the sales and production managers unethical
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started