Week 6 Assignment – Case on Budgeting

Overview 

You  are hired as a new cost accountant to Ciccetti Corporation. The company  manager, David, is having a meeting with you in his office. He brought  you this budgeted income statement that was completed by the previous  cost accountant. David asks you to provide him with a report explaining  the statement in clear, straightforward language, and how you plan to  handle the annual budget. 

       Flexible Budget Performance Part 2           Flexible Budget Activity Variances Planning Budget     Customers served (q) 36,000   33,000   Revenue ($4.80q) $172,800 $14,400 F $158,400   Expenses:         Wages and salaries ($36,900 + 1.60q) 94,500 4,800 U 89,700   Supplies ($0.90q) 32,400 2,700 U 29,700   Insurance ($13,300) 13,300 0    13,300   Miscellaneous Expense ($6,300 + $0.40q) 20,700 1,200 U 19,500   Total expense 160,900 8,700 U 152,200   Net operating income $11,900 $5,700 F $6,200    

Instructions 

Write a 2–3 page report in which you: 

1. Explain the budgeted income statement. 
2. Outline how you would create annual budgeted financial statements.  
3. Analyze the difference between a static budget and a flexible budget, including the importance of each.  
4. Evaluate the importance of reading and correctly interpreting budgeted financial statements.
5. Use  three sources to support your writing. Choose sources that are  credible, relevant, and appropriate. Cite each source listed on your  source page at least one time within your assignment. For help with  research, writing, and citation, access the library, or review library guides.

This course requires the use of Strayer Writing Standards. For  assistance and information, please refer to the Strayer Writing  Standards link in the left-hand menu of your course. Check with your  professor for any additional instructions.

The specific course learning outcome associated with this assignment is:

• Analyze the accuracy of a business's budgeting process to help managers make effective decisions.