Budget Analysis

1206 Words Jul 9th, 2016 5 Pages
The following report consists of an analysis of the company budget, identification of key variances and findings, and suggestions on operational changes. A description of the budget process will be presented to pinpoint variances and their causes. Based on these variances, operational changes will be suggested and explained while considering business ethics. Recommendations on particular component production as well as nonfinancial performance measures will be made and accompanied by supporting evidence. First, the following is a brief overview of the budget and budget process. Budgets are an indicator of the costs and revenues linked to each of the companies activities and a way of providing information and supporting mangement …show more content…
There are associated ethical considerations to several of the recommended changes. Strengthening the interview and hiring process will help to eliminate the hiring of unqualified candidates whose only experience with the work is through a personal connection with existing employees. This will help to ensure that candidates with the proper qualifications are placed in positions that are currently experiencing inefficiences. Reevaluating the material suppliers could potentially eliminate any improper compensation between current management and the supplier and reduce the acceptance of inferior materials. Increasing the proper storage of accepted material will not only elimate the waste of improperly stored materials, but also reduces the risk management threat of theft by employees. These are the ethical considerations of several of the recommended changes. Upon deciding whether to make or buy products, the company must consider several items. Management must exam the company’s variable cost compared to the costs associated with buying, as well as any fixed costs that would arise due to purchasing rather than making (Nobles et. al., 2014). Management must also consider what the company would do with the freed up manufacturing capacity (Nobles et. al., 2014). The quality of products being bought must be considered, especially since the company will not be able to personally supervise the production of bought products. While making this
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