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Question 1
The purpose of Body Glove budgeting system is to minimize the expenses based on
The budgeting system help to draw a better picture on the how much to spend on
this case the company production cost are different in two seasons as the cost of
full fall suit averaged about $100 as for the spring line it was about $60. The $40
Question 2
The budgeting process began in November by estimating the sales growth and then
Russ consolidated, reviewed, and discussed them with his managers, suggesting
changes if any.
The budget was finalized by the end of December. Russ approved the budget
himself.
During the year the budget was used to monitor the performance as well as to
monthly basis.
Question 3
Body Glove didn’t function effectively without the budgeting system. Its reputation
was negatively perceived due to late delivery due to unbalancing the inventory
stockouts and inventory carrying cost. This is due to the uncertainty demand in the
Question 4
The budgeting plan needs to go through the board of directors in order to minimized
Question 5
The current budget system doesn’t have link between the short-run budget and
long-term budget. On the other hand the long-run budget plan was not clear as
Russ said “If the bank ever wants numbers, I can give them to them. In fact, I can
give them any set they want. It’s all smoke”. It will not be good for the organization
as it doesn’t have clear direction for long term. The budget system was not as
We recommend revising the long-run budgeting plan more specifically link directly
to the strategic plan and they should find a way to link short-run and long-run
budget in order to ensure that the short-run performance doesn’t affect negatively
to the long-run budget. They should link the budget related to the performance with
performance based incentive by adding bonus for those managers who meet the