This case is designed to evaluate the budget process at a large manufacturing co

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This case is designed to evaluate the budget process at a large manufacturing co

This case is designed to evaluate the budget process at a large manufacturing company.
The learning objectives of this case study are as follows:
Use the budget to make decisions.
Identify how budgeting is used by leadership for planning and control.
Discuss ethical considerations in the budget process.
You have just been hired at ABC Manufacturing, and your supervisor has invited you to sit in on today’s budget meeting. You are given a copy of the following proposed budget for next year to review. The budget is being used by ABC to plan for next year. Your supervisor tells you right before the meeting, “We always overestimate because the president always makes us cut the budget by 20%, and besides, I really want to go to that conference in Las Vegas next year.” He continued,” I have really worked hard this year and put in a lot of overtime so I deserve it.”
Prepare a one- to two-page written report by addressing the following tasks:
Discuss if you think ABC Manufacturing is properly using the budget process to plan for next year’s expenses.
Discuss the comment about the president cutting the budget each year in terms of proper leadership and control?
Discuss the ethical issues related to inflating the budget.
QUESTIONS THAT SHOULD BE ANSWERED IN THE PAPER:
YOU ARE GIVEN A COPY OF THE BUDGET TO PLAN FOR THE UPCOMING YEAR.
THE SUPERVISOR TELLS YOU THAT THEY ALWAYS OVERESTIMATE THE BUDGET BECAUSE THE PRESIDENT ALWAYS CUTS THE BUDGET BY 20% AND I WANT TO GO TO A CONFERENCE NEXT YEAR BECAUSE I WORKED HARD FOR IT AND I DESERVE IT.
1. TALK ABOUT WHEHTER YOU THINK THE COMPANY IS POPERLY USING THE BUDGET PROCESS FOR NEXT YEAR’S EXPENSES
2. DISCUSS THE COMMENTS ABOUT THE PRESIDENT CUTTING THE BUDGET BY 20% EACH YEAR IN TERMS OF LEADERSHIP AND CONTROL. DO YOU THINK THAT THE PRESIDENT CUTTING THE BUDGET BY 20% ACROSS THE BOARD EACH YEAR IS EXCERSING PROPER LEADERSHIP AND CONTROL WHY OR WHY NOT.
3. DISCUSS THE ETHICAL ISSUES ABOUT INFLATING AND PADDING THE BUDGET. ARE THE ACTS OF THE SUPERVISOR OF INFLATING THE BUDGET BY 20% BECAUSE HE KNOWS THAT IT WILL BE CUT BY 20%, PLUS PADDING THE BUDGET TO ENSURE THAT THERE IS ENOUGH MONEY FOR HIM TO GO TO VEGAS ETHICAL OR NOT AND EXPLAIN WHY?

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