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Business Accounting Essay

3897 words - 16 pages

Contents2INTRODUCTION 3Explain the purpose and nature of the budgeting process which should normally be taken in the preparation of budgets for subsidiary 'XYZ'. (3.1) 4Select appropriate budgeting methods for subsidiary 'XYZ' and its needs. Prepare budgets (from January 2012 to June 2012) according to the chosen budgeting method based on the given information in the scenario and also prepare a cash budget. (3.2, 3.3, 3.4) 12Calculate variances, identify possible causes and recommend corrective action. Prepare an operating statement reconciling budgeted and actual results (4.1, 4.2) 14Write a memo and report findings to management in accordance with identified responsibility centres based on ...view middle of the document...

This budget is for deciding that we will increase or decrease the number of finished goods in stock.Step 2: Identify potential strategies: Identify a range of possible courses of action or strategies. The Quanta Computer subsidiary "XYZ" needs to set up the strategies and analysis the internal and external environment. Therefore, the company can take appropriate strategies for achieving the organization's objectives.Step 3: Evaluate strategies: All strategies must be evaluated in case of suitability, feasibility and acceptability in the context of strategic analysis. So that, the company can has a greatest potential strategies to run business.Step 4: Choose alternative courses of action: the manager of company will choose all strategies and co-ordinate them into a long-term plan.Step 5: Implement the long-term plan: be broken down into smaller parts. It will help company easily control the plan.Step 6 and 7: Measure actual results and compare with plan. Respond to divergences from plan. Its means when company finish the long-term plan, the actual results should be compared with those expected under the long term plan. Through that, company will have appropriate decision to run their business.Furthermore, XYZ must be considered thoroughly the purpose and interests of budget with its vital factors:Communication: the comprehend communication by all departments of XYZ in the budget process helps ensure the success of all XYZ's goals by make all plans and effort well done.Coordination: A good coordination acquired by having the comprehensive in all units of XYZ is one of the priority in its operation process, unless the company will fail. For example, the marketing department must have a good coordination with distributors to improve sales record.Planing: Having a specific plan for budget is very useful for the survival of XYZ or any corporations in the long-run. Anyone want to operating a business must have a good accounting in building factories, showroom, human resource management, public relationship, etc…Control: By controlling the budget process, XYZ will have the good operating process of itself by deciding a effective and economical activities for its development.Evaluation: Any evaluation (made by economists or any professionals … ) could reflect, anyway, the efficiency of the operating process of XYZ or not . Moreover, it it shows good or not good for XYZ, executives will have good looks for the development of this business.Nature of Budget: is a prediction and effect on:Profit Loss Statement: indicates effective businessBalance sheet: shows out financial status of business at a period of timeCash flow statement: business account in specific times.Good budget investment will make the stable development for XYZ by make it survival in any harsh conditions or be favorable in any activities,ALSO IMPROVE ITS COMPETITION IN BUSINESS.Select appropriate budgeting methods for subsidiary 'XYZ' and its needs. Prepare budgets (from...

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