Budgeting Questions and Issues Essay

Open, View, and/or
Download this Document

Total Length: 1418 words ( 5 double-spaced pages)

Total Sources: 4

Page 1 of 5

Management accountability to stakeholders first requires consideration of who those stakeholders are. When considering financial accountability, the primary defined stakeholders for annual reports are the shareholders or owners of the firm (Elliott and Elliott, 2013). Therefore, this establishes the need for management accountability towards this group of stakeholders, the process which is satisfied not only for annual accounts, but also from quarterly earnings as well as other statements. However, there are other stakeholders which will have a direct impact on the firm, and either directly or indirectly influence their performance. This includes, but is not limited to, government, customers, and suppliers.

Government accountability requires a firm to demonstrate for compliance with regulation, and where governments are not fully satisfied that firms are acting in an appropriate manner, they are likely to introduce more legislation. Customers will have needs regarding the products and services they purchase, this will not only be related to the product's features and characteristics, but the perceptions of the firm and way in which they provide those products. For example, when Shell chose to dispose of the Brent Spar oil platform in the North Sea, the company faced a backlash from customers refusing to buy their products believing the company was acting in an irresponsible manner, causing environmental pollution (Chyssides and Kaler, 1999). Therefore, management accountability can extend to aspects such as corporate social responsibility, firm values, as well as firm image, and the way in which this is displayed to and demonstrated to all stakeholders, including customers.

Part B

An organisation such as GDC needs to ensure they keep the most important stakeholders happy, otherwise they will suffer. However, it should be noted that not all stakeholders will have an equal level of influence over the firm's operations and performance. To retain sales, it is essential that the organisation satisfy customer needs, regarding products, as well as values and operational decisions (Chyssides and Kaler, 1999). To continue operating, it is essential that the organisation is able to satisfy government requirements and regulations, otherwise they will face significant financial consequences such as fines, and may even be shut down (Mintzberg et al., 2008).

Stuck Writing Your "Budgeting Questions and Issues" Essay?

View All Our Example Budgeting Questions and Issues Essay

Have A Custom Example Essay Written

If the company does not satisfy supplier needs, they may lose a supplier, but here there is also the potential for the organisation to use their own power, as this is a bilateral relationship, and suppliers may also need the company. Secondary stakeholders, such as local residents, may be able to exert influence over the organisation, but it may be less direct, for example it may be felt if the organisation seeks to extend the offices, as local residents may object using local planning processes.

Question 2

To calculate the cost of goods manufactured it is necessary to assess the costs have been incurred during the period. The calculation for costs of goods manufactured is the cost of the direct materials used added to the direct labour used, added to the manufacturing overhead, which will give the manufacturing costs that have been incurred during that period. The figure there needs to be adjusted allowing for work in progress levels, adding the level of work in progress which was present at the beginning of the period, and deducting the work in progress that was present at the end.

First we calculate materials used

Purchased

Plus beginning inventory

Less ending Inventory

Materials used

Materials

154,000

58,000

64,000

148,000

This can now be used to calculate cost of goods manufactured

Materials used

148,000

Direct labor

174,000

Overhead

90,000

Manufacturing costs for current period

412,000

Plus opening work in progress

88,000

Less closing work in progress

74,000

Cost of goods manufactured

426,000

Using cost of goods manufactured it is possible to calculate cost of goods sold. The formula for this is opening finished goods inventory, plus cost of goods manufactured, less finished goods closing inventory.

Opening finished goods inventory

38,000

Cost of goods manufactured

426,000

Closing finished goods inventory

48,000

Cost of goods sold

416,000

Base on the information provided, assuming all the revenue recorded is the same period as the goods manufactured, the gross profit can be calculated. The formula is the total revenue less the cost of goods sold.

Revenue

512,000

Cost of goods sold.....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Budgeting Questions And Issues" (2016, April 06) Retrieved July 5, 2025, from
https://www.aceyourpaper.com/essays/budgeting-questions-issues-2159614

Latest MLA Format (8th edition)

Copy Reference
"Budgeting Questions And Issues" 06 April 2016. Web.5 July. 2025. <
https://www.aceyourpaper.com/essays/budgeting-questions-issues-2159614>

Latest Chicago Format (16th edition)

Copy Reference
"Budgeting Questions And Issues", 06 April 2016, Accessed.5 July. 2025,
https://www.aceyourpaper.com/essays/budgeting-questions-issues-2159614
   

Open, View, and/or
Download this Document
order custom essay example