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3 years ago

Why is budgeting important for a company? What are some reasons that a company would not prepare a budget?

2 answers:

7 0

Answer: Budgeting helps to plan, coordinate , delegate responsibility and enhancing clarity in pursuit of an organisation.

Explanation: Every budgets is principally prepared to achieve a set target but there some limitations which makes it difficult for some companies to prepare and follow through with a budgeted plan action. Some of these limitations at any given point in time affect the activities of the organisation. It may be traced to Production capacity, shortage of labour, materials, space, Finance and customer demand. This limitation can at any point in time affect the overall plan of the organisation making it difficult to achieve their set target .

grandymaker [24]3 years ago

7 0

Answer:

Budgeting is important for a company as it provides the following

a disciplined approach to the solutions of the problems
obliging management to make an early study of its problems and instilling into an organization the habit of careful study before making decisions.
co ordinating and correlating all efforts since no management activity reveals weaknesses in organization as quickly as the orderly procedure for systematic budgeting.
aiding in directing capital and effort into most profitable channels.
developing throughout the organization an atmosphere of profit minded ness and encouraging an attitude of cost consciousness and maximum resource utilization.

Intelligent Budgeting is a difficult task , it needs a lot of expertise , times and is sometimes costly. Time constraints can be handled more effectively ,by converting the elements of conventional into a functional planning tool through the use of computer modelling techniques.

Companies may not use budgeting for following reasons.

Smaller or very large companies where profit remains unaltered year after year do not require a budget. They are sure that the next year would be the same as the current year.
their reports are very well maintained. Companies whose reports are very well maintained do not require a budget because the whole information or decision making or future planning can well be comprehended from these reports.
business is facing losses or is in a situation where it is useless to predict its future.

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You run a school in Florida. Fixed monthly cost is $5,835.00 for rent and utilities, $5,906.00 is spent in salaries and $1,061.0

olga55 [171]

Answer: 1.621

Explanation:

The old charge per student was $678 per month

The new charge is $1,099.

The percent of the new charge compared to the old according to the question methodology is:

= New charge per student / old charge per student

= 1,099/678

= 1.621

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3 years ago

The Vogt corporation paid a dividend of $4.20 on its stock in the year just ended. If the dividends are projected to grow at a r

Jet001 [13]

Answer:

cost of equity = 13%

Explanation:

With the info given, we will use cost of equity formula from Dividend Growth Model. THis is given by:

$k_e=\frac{D_1}{P_0}+g$

Where D_1 is the next year dividend or D_1 = D_0(1+g)

P_0 is current stock price

g is the growth rate

Since D_0 (dividend this year) is 4.20 and g = 6.4% or 0.064, we can calculate D_1:

$D_1=D_0(1+g)=4.2(1+0.064)=4.47$

Current share price is 68, so we can now calculate cost of equity:

$k_e=\frac{4.47}{68}+0.064=0.13$

Hence,

cost of equity = 13%

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3 years ago

The product structure overcomes one of the challenges common to a functional organization structure because it is

Alona [7]

Answer:

focus on the goods being made

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1 year ago

In agriculture, a "bumper crop" refers to a particularly productive harvest. if there is a bumper crop for wheat at the same tim

WINSTONCH [101]

The equilibrium price will go down and equilibrium quantity will be indeterminate.
Bumper crop refers to a situation when a certain type of crop exeprience sudden bump in productivity. If at that exact time more people become allergic to this crop, the crop would be overly stocked in the warehouse and the owner would most likely sell it at lower price.

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3 years ago

A cash-basis sole proprietor had the following cash receipts and disbursement for the year: Net sales - $80,000 Cost of goods so

DIA [1.3K]

Answer:

Net Income is $17,000

Explanation:

A sole proprietor is not taxed as a business entity but all the income and expenses should be reported on the income tax return. On schedule C all the details of profit and loss should be submitted with Form 1040.

Net profit calculation to report on Schedule C is as follow:

Net sales - $80,000

Cost of goods sold ($40,000)

Gross Income $40,000

Operating expenses ($20,000)

Operating Income $20,000

Employee payroll taxes ($3,000)

Net Income $17,000

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3 years ago