{"id":124547,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/how-budgetary-control-system-could-be-revised-to-improve-3"},"modified":"2017-08-16T06:12:35","modified_gmt":"2017-08-16T06:12:35","slug":"how-budgetary-control-system-could-be-revised-to-improve-3","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/how-budgetary-control-system-could-be-revised-to-improve-3\/","title":{"rendered":"How budgetary control system could be revised to improve"},"content":{"rendered":"
\n

Tom Emory and Jim Morris strolled back to their plant from the administrative offices of the Ferguson & Son Mfg. Company. Tom is the manger of the machine shop in the company\u2019s factory. Jim is the manager of the equipment maintenance department. The men had just attended the monthly performance evaluation meeting for plant department heads. These meetings had been held on the third Tuesday of each month since Robert Ferguson, Jr., the president\u2019s son, had become the plant manager a year earlier. As they were walking, Tom Emory spoke. \u201cBoy, I hate those meetings! I never know whether my department\u2019s accounting reports will show or bad performance. I am beginning to expect the worst. If the accountants said I saved the company a dollar, I\u2019m called Sir, but if I spend even a little too much- boy do I get in trouble.<\/p>\n

I don\u2019t know if I can hold on until I retire.\u201d Tom had just been given the worst review he had ever received in his long career with Ferguson & Son. He was the most respected of the experienced machinists in the company. He had been with Ferguson & Son for many years and was promoted to supervisor of the machine shop when the company expanded and moved to its present location. The president (Robert Ferguson, Sr.) had often stated that the company\u2019s success was due to the high quality of the work of the machinists like Tom. As a supervisor, Tom stressed the importance of craftsmanship and told his workers that he wanted no sloppy work coming from his department. When Robert Ferguson, Jr. became the plant manager, he directed that monthly performance comparisons be made between actual and budgeted costs for each department. The departmental budgets were intended to encourage the supervisor\u2019s to reduce inefficiencies and to seek cost reduction opportunities. The company controller was instructed to have his staff \u201ctighten\u201d the budget slightly whenever a department attained its budget in a given month; this was done to reinforce the plant supervisor\u2019s desire to reduce costs. The young plant manager often stressed the importance of continued progress toward attaining the budget; he also made it known that he kept a file of these performance reports for future reference when he succeeded his father.<\/p>\n

Tom Emory\u2019s conversation with Jim Morris continued as follows: Emory: I really don\u2019t understand. We worked so hard to get up to budget, and the minute we make it they tighten the budget on us. We can\u2019t work any faster and still maintain the quality. I think my men are ready to quit trying. Besides, those reports don\u2019t tell the whole story. We always seem to be disrupting the big jobs for the small rush orders. All that setup and machine adjustment time is killing us. And quite frankly, Jim, you were no help. When our hydraulic press broke down last month, your people were nowhere to be found. We had to take it apart ourselves and got stuck with all the idle time. Morris: I\u2019m sorry about that, Tom, but you know my department has had trouble making budget too. We were running well behind at the time of that problem, and if we\u2019d spent a day on the old machine, we would never had made it up. Instead we made the scheduled inspections of the forklift trucks because we knew we could do those in less than the budgeted time. Emory: Well, Jim at least you have some options. I\u2019m locked into what the scheduling department assigns me and you know they\u2019re being harassed by sales for those special orders. Incidentally, why didn\u2019t your report how all the supplies you guys wasted last month when you were working in Bill\u2019s department? Morris: We are not out of the woods yet.<\/p>\n

We charged the maximum we could to our other work and haven\u2019t reported some of it yet. Emory: Well, I\u2019m glad you have a way of getting out of the pressure. The accountants seem to know everything that\u2019s happening in my department, sometimes even before I do. I thought all that budget and accounting stuff was supposed to help, but it just gets you into trouble. It\u2019s all a big pain. I\u2019m trying to put out quality work, they\u2019re trying to save pennies.<\/p>\n

Required:<\/p>\n

1. Identify the problems which appear to exist in Ferguson & Son Mfg. Company\u2019s budgetary control system and explain how the problems are likely to reduce the effectiveness of the system.<\/p>\n

2. Explain how Ferguson & Son Mfg. Company\u2019s budgetary control system could be revised to improve its effectiveness?<\/p>\n<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Tom Emory and Jim Morris strolled back to their plant from the administrative offices of the Ferguson & Son Mfg. Company. Tom is the manger of the machine shop in the company\u2019s factory. Jim is the manager of the equipment Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-124547","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/124547","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=124547"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/124547\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=124547"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=124547"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=124547"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}