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12 Jun 2019
Pretorious Manufacturing has just hired a new controller, DianaMetcalf. During her first week on the job, Diana was asked toestablish a budget for operating expenses in 2014. Since Diana wasnot yet familiar with the operations of Pretorious Manufacturing,she decided to budget these expenses using the same procedures asthe prior controller. Therefore, in order to establish a budget foroperating expenses, Diana started with actual operating expensesincurred in 2013 and added 4.3 percent. Diana based this percentageon inflation as measured by the consumer price index.
Comment on the effectiveness of Dianaâs budgeting strategy.
Pretorious Manufacturing has just hired a new controller, DianaMetcalf. During her first week on the job, Diana was asked toestablish a budget for operating expenses in 2014. Since Diana wasnot yet familiar with the operations of Pretorious Manufacturing,she decided to budget these expenses using the same procedures asthe prior controller. Therefore, in order to establish a budget foroperating expenses, Diana started with actual operating expensesincurred in 2013 and added 4.3 percent. Diana based this percentageon inflation as measured by the consumer price index.
Comment on the effectiveness of Dianaâs budgeting strategy.
Hubert KochLv2
13 Jun 2019
