Letsgo Travel Trailer
Budgeting is one of the most important processes when running a business. Manager often tells the accountant to prepare budgets so that he or she can capitalize on the budgets and makes decision. In this case, Letsgo Travel Trailer’s manager needs to prepare the budgets for the sake of the company. By doing so, there are many advantages that the company can gain.
First of all, there are many reasons for Letsgo Travel Trailer to prepare the budgets.
Sale Budget and Production budget can let the staffs concerned have the clear vision and know that how many units should they sell or produce in the specific times. Since there are goals that shall be attained, the employees will do their best to do so. Alongside this, the manager …show more content…
We know that he is eligible for a 20% bonus based on sales so he can gain a lot from it if the president of the company still follows this policy. Moreover, it’s supposed that the employees of Sales Department also enjoy the sale bonus. They all can take the advantages of the huge sales to get more money. Alongside this, the accounting manager will receive the bonus for having prepared the budgets on time with little or no help from the other functional areas. This policy may lead to the incorrect data in the budgeting process. The accountant involved may well not to consult the other functional areas so that they may gain the bonus at ease. This is always true when the other areas’ jobs are tedious and hard to get the real figures. The thriving sales may also give the reason to the accountant involved not to do any extra works with the help of others.
In this case, the production budget is prepared based on the normal method instead of
Just-In-Time method. By doing so, Letsgo’s vice-president of purchasing and materials handling Vicky Draper cannot lower the raw material cost in an attempt to offset the expense of distribution. As a result, she needs to bear the distribution expense and has
First of all, there are many reasons for Letsgo Travel Trailer to prepare the budgets.
Sale Budget and Production budget can let the staffs concerned have the clear vision and know that how many units should they sell or produce in the specific times. Since there are goals that shall be attained, the employees will do their best to do so. Alongside this, the manager …show more content…
We know that he is eligible for a 20% bonus based on sales so he can gain a lot from it if the president of the company still follows this policy. Moreover, it’s supposed that the employees of Sales Department also enjoy the sale bonus. They all can take the advantages of the huge sales to get more money. Alongside this, the accounting manager will receive the bonus for having prepared the budgets on time with little or no help from the other functional areas. This policy may lead to the incorrect data in the budgeting process. The accountant involved may well not to consult the other functional areas so that they may gain the bonus at ease. This is always true when the other areas’ jobs are tedious and hard to get the real figures. The thriving sales may also give the reason to the accountant involved not to do any extra works with the help of others.
In this case, the production budget is prepared based on the normal method instead of
Just-In-Time method. By doing so, Letsgo’s vice-president of purchasing and materials handling Vicky Draper cannot lower the raw material cost in an attempt to offset the expense of distribution. As a result, she needs to bear the distribution expense and has