Assignment: Budgeting Comments, Standard Cost System & Journal
Part 1: Budgeting Comments
(Exercise 6-13 - Revised) Select one of the following quotes from the text to discuss. Clearly state whether you either agree or disagree with the comment and support your opinion with at least one scholarly resource. Include in your response an explanation of the major purposes of budgeting. Your initial post should be 200-250 words.
"One major criticism of budgeting is that it is used as a ‘cost reduction' tool rather than a ‘cost control' tool. The objective of the budget is to control costs at an efficient level of operation."
"There are generally three benefits from allowing employees to participate in developing the budget: (1) Employees tend to accept the budget as their own plan of action. (2) Participation tends to increase morale among employees and toward management. (3) Employee cohesiveness is increased, and productivity will also increase if dictated by the group norm."
"Even though budgets are quantitative tools, considerable emotion is connected to budgeting. The individual in control often sees the budget as a means of getting things done. People being controlled often have feelings of anxiety because their success and promotion are tied directly to the budget."
Part 2: Standard Cost System
Using Chapter 7 of your text as a reference, define a standard cost and explain what constitutes the components of a standard cost. Describe the advantages and disadvantages of a standard cost system and explain under what circumstances a standard cost system is most effective. Your initial post should be 200-250 words.
Part 3: Journal
Budgets and Employee Morale
Budgets play a critical role in management activities such as planning, controlling and motivating employees. Used effectively, budgets can help a company achieve its goals and create a productive work environment. In contrast, budgets can also create a hostile work environment. Consider the relationship between budgets and employee morale and then reflect upon your own work experiences. Explain how budgeting was incorporated to achieve the company's overall goals and objectives. Reflect on whether or not the budgets were effectively applied and whether your experience was positive or negative. Why do employees have so much emotion when it comes to budgets and budgeting decisions?
Required Resource
Text
Schneider, A. (2017). Managerial Accounting: Decision making for the service and manufacturing sectors (2nd ed.) [Electronic version].
· Chapter 6: Cost Estimation and Cost-Volume-Profit Relationships
· Chapter 7: Budgeting for Operations Management
Multimedia
Benjamin, A. (2009, February). Arthur Benjamin: Teach statistics before calculus! [Video file].
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.