Managerial Accounting Practices

In: Business and Management

Submitted By Farishf
Words 1129
Pages 5
Management and budgeting go hand in hand through all phases of an organizations business day and it does not matter how large or small the business entity is. Working through the confines of an entities budget can be mentally exhausting and the scenarios given below offer no exception to this rule. In today’s assignment we have the task working through two different scenarios in responding to received emails.
To Andrew President of the new South –East Division;
Congratulations on your new position of our electrical components division, I understand your concern about the out of control sales costs, I know that you are only two months into the project and sometimes there are unforeseen start up costs, and then there is the separation of needs versus wants considerations of your budget. As you are probably aware of this separation process is helpful in staying within the confines of your budget, for instance is your budget out of control because of purchasing new equipment instead of maximizing the usage from the older equipment, or perhaps your overtime man-hours are in excess of the allotted budget, if this is the case perhaps this area should be scrutinized for maximum efficiency. Remember the purpose of the budget is to help define what expenses are acceptable, and what funds to allocate to each area of the project, in order to perform this correctly you need to figure out how much money can be spent on the man-hours and still be able to meet the necessary utilities and maintenance, and still have money to efficiently produce the materials needed to manufacture your electrical components. (Davis Service Group, 2013, p. 1)
The advantages of working within your budget allows you to keep track of all expenses as they occur without overspending on unnecessary items, a major disadvantage of working with a budget however is that it does not allow for unexpected…...

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