Homework: Case on Budgeting
Overview
You are hired as a new cost accountant to Ciccetti Corporation. The company manager, David, is having a meeting with you in his office. He brought you this budgeted income statement that was completed by the previous cost accountant. David asks you to provide him with a report explaining the statement in clear, straightforward language, and how you plan to handle the annual budget.
Flexible Budget Performance Part 2 Flexible Budget Activity Variances Planning Budget Customers served (q) 36,000 33,000 Revenue ($4.80q) $172,800 $14,400 F $158,400 Expenses: Wages and salaries ($36,900 + 1.60q) 94,500 4,800 U 89,700 Supplies ($0.90q) 32,400 2,700 U 29,700 Insurance ($13,300) 13,300 0 13,300 Miscellaneous Expense ($6,300 + $0.40q) 20,700 1,200 U 19,500 Total expense 160,900 8,700 U 152,200 Net operating income $11,900 $5,700 F $6,200
Task
Write a 2 to 3 page report in which you:
o Explain the budgeted income statement.
o Outline how you would create annual budgeted financial statements.
o Analyze the difference between a static budget and a flexible budget, including the importance of each.
o Evaluate the importance of reading and correctly interpreting budgeted financial statements.
Format your homework according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.
The specific course learning outcome associated with this homework is:
o Analyze the accuracy of a business's budgeting process to help managers make effective decisions.