B6022 EXceptional Education/snaptutorial.COM

1. B6022 Module 1 Assignment 3 Calculating Financial Ratios For more classes visit www.snaptutorial.com B6022 Module 1 Assignment 3 Calculating Financial Ratios ital to any ratio analysis are the steps of gathering financial data and selecting and calculating relevant ratios. This assignment provides you with an opportunity to do just that. Task: Download a company’s balance sheet and income statement from one of the many sites where financials are available, such as Zacks Investment Research or MarketWatch. Choose five financial ratios, one from each of the five categories described in Chapter 3 of Brigham and Ehrhardt (i.e., liquidity, asset management, financial leverage, profitability, and market value) and look at them over a three-year period. Put your findings in a table with the years across the top (horizontal axis) and the ratios along the side (vertical axis). What do the findings tell you about the financial health of the company? How does your selected company compare to the industry? Calculate each ratio using the information from the balance sheet and income statement. Write a 2–3-page paper that reports your findings.

2. B6022 Module 1 Assignment 4 Financial Ratio Analysis . Assignment-4-Financial-Ratio-Analysis For more classes visit www.snaptutorial.com B6022 Module 1 Assignment 4 Financial Ratio Analysis ********************************* B6022 Module 2 Assignment 2 Time Value of Money com/B6022/product-36839-B6022-Module-2-Assignment-2- Time-Value-of-Money For more classes visit www.snaptutorial.com B6022 Module 2 Assignment 2 Time Value of Money When the Genesis and Sensible Essential teams held their weekly meeting, the time value of money and its applicability yielded an

3. extremely stimulating discussion. However, most of the team members from Genesis were very perplexed. Sensible Essentials decided the most expedient way to demonstrate how interest rates as well as time impact the value of money was to use examples. You have been asked to prepare a report analyzing your findings of the three example calculations listed below. In this assignment, you will do the following: Calculate the future value of $100,000 ten years from now based on the following annual interest rates: 2% 5% 8% 10% Calculate the present value of a stream of cash flows based on a discount rate of 8%. Annual cash flow is as follows: Year 1 = $100,000 Year 2 = $150,000 Year 3 = $200,000 Year 4 = $200,000 Year 5 = $150,000 Years 6-10 = $100,000 Calculate the present value of the cash flow stream in problem 2 with the following interest rates: Year 1 = 8% Year 2 = 6% Year 3 = 10% Year 4 = 4% Year 5 = 6% Years 6-10 = 4 Perform your calculations in an Excel spreadsheet. Copy the calculations in a Word document. In addition, write a 2- to 3-page executive summary in Word format. Your summary should reflect a proper analysis of your findings, including a comparison and contrast of data. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M2_A2.doc. ********************************* B6022 Module 3 Assignment 2 LASA 1 Genesis Energy Cash Position Analysis

4. http://www.snaptutorial.com/B6022/product-36840-B6022- Module-3-Assignment-2-LASA-1-Genesis-Energy-Cash- Position-Analysis For more classes visit www.snaptutorial.com B6022 Module 3 Assignment 2 LASA 1 Genesis Energy Cash Position Analysis The Genesis Energy operations management team is now preparing to implement the operating expansion plan. Previously, the firm’s cash position did not pose a challenge. However, the planned foreign expansion requires Genesis Energy to have a reliable source of funds for both short-term and long-term needs. One of Genesis Energy’s potential lenders tells the team that in order to be considered as a viable customer, Genesis Energy must prepare and submit a monthly cash budget for the current year and a quarterly budget for the subsequent year. The lender will review the cash budget and determine whether or not Genesis Energy can meet the loan repayment terms. Genesis Energy’s ability to repay the loan depends not only on sales and expenses but also on how quickly the company can collect payment from customers and how well it manages its supplier terms and other operating expenses. The Genesis Energy team members agreed that being fully prepared with factual data would allow them to maximize their position as well as negotiate favorable financing terms.

5. The Genesis Energy management team held a brainstorming session to chart a plan of action, which is detailed here. Evaluate historical data and prepare assumptions that will drive the planning process. Produce a detailed cash budget that summarizes cash inflow, outflow, and financing needs. Identify and compare interest rates, both short-term and long-term, using debt and equity. Analyze the financing mix (short/long) and the cost associated with the recommendation. Since this expansion is critical to Genesis Energy expanding into new overseas markets, the operations management team has been asked to prepare an executive summary with supporting details for Genesis Energy’s senior executives. Working over a weekend, the management team developed realistic assumptions to construct a working capital budget. Sales: The marketing expert and the newly created customer service personnel developed sales projections based on historical data and forecast research Other cash receipt: Rental income $15,000 per month Production material: The production manager forecasted material cost based on cost quotes from reliable vendors, the average of which is 50 percent of sales

6. Other production cost: Based on historical cost data, this cost on an average is 30 percent of the material cost and occurs in the month after material purchase Selling and marketing expense: Five percent of sales General and administrative expense: Twenty percent of sales Interest payments: $75,000—Payable in December Tax payments: $15,000—Quarterly due on 15th of April, July, October, and January Minimum cash balance desired: $25,000 per month Cash balance start of month (December): $15,000 Available short-term annual interest rate is 8 percent, long-term debt rate is 9 percent, and long-term equity is 10 percent. All funds would be available the first month when the firm encounters a deficit Dividend payment: None Based on this information, do the following: Using the Cash Budget spreadsheet, calculate detailed company cash budgets for the forthcoming and subsequent years. Summarize the sources and uses of cash, and identify the external financing needs for both the forthcoming and subsequent years. Download this Excel spreadsheet to view the company’s cash budget. You will calculate the company’s monthly cash budget for the forthcoming year and quarterly budget for the subsequent year using this information.

7. In an executive-level report, summarize the company's financing needs for the forecast period and provide your recommendations for financing the planned activities. Be sure to comment on the following: Your recommended financing solution and cost to the firm: If Genesis Energy needs operating cash, how should it fund this need? Are there internal policy changes with regard to collections or payables management you would recommend? What types of external financing are available? Your concerns associated with the firm's cash budget. Is this a sign of weak sales performance or poor cost control? Why or why not? Write a 7-page paper in Word format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M3_A2.doc. ********************************* B6022 Module 4 Assignment 2 Cost of Debt and Equity http://www.snaptutorial.com/B6022/product-36841-B6022- Module-4-Assignment-2-Cost-of-Debt-and-Equity For more classes visit www.snaptutorial.com

8. B6022 Module 4 Assignment 2 Cost of Debt and Equity The manager of Sensible Essentials conducted an excellent seminar explaining debt and equity financing and how firms should analyze their cost of capital. Nevertheless, the guidelines failed to fully demonstrate the essence of the cost of debt and equity, which is the required rate of return expected by suppliers of funds. You are the Genesis accountant and have taken a class recently in financing. You agree to prepare a PowerPoint presentation of approximately 6–8 minutes using the examples and information below: Debt: Jones Industries borrows $600,000 for 10 years with an annual payment of $100,000. What is the expected interest rate (cost of debt)? Internal common stock: Jones Industries has a beta of 1.39. The risk-free rate as measured by the rate on short-term US Treasury bill is 3 percent, and the expected return on the overall market is 12 percent. Determine the expected rate of return on Jones’s stock (cost of equity). Here are the details: Jones Total Assets $2,000,000 Long- & short-term debt $600,000 Common internal stock equity $400,000 New common stock equity $1,000,000 Total liabilities & equity $2,000,000

9. Develop a 10–12-slide presentation in PowerPoint format. Perform your calculations in an Excel spreadsheet. Cut and paste the calculation into your presentation. Include speaker’s notes to explain each point in detail. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M4_A2.ppt ********************************* B6022 Module 5 Assignment 1 Performance Measurements For more classes visit www.snaptutorial.com B6022 Module 5 Assignment 1 Performance Measurements Both the Genesis and Sensible Essentials teams believe that the client engagement was very successful. All the critical learning tools were fully explored. However, the operations management team believes there were several topics that were not covered but are important to their respective disciplines. These topics centered primarily on selecting/developing meaningful and rational measurements of performance as they relate to measuring the success of the company’s expansion strategy. The financial indicators are important, but the team is also concerned about more forward-looking measures that might reflect product quality,

10. customer satisfaction, internal process efficiency, performance, and perhaps, other strategic indicators. Based on your understanding of the concepts covered in this course, address the following: Develop and describe a strategic measurement “scorecard” that incorporates the financial measures applied in this course. Consider the prospect of new equity owners and explain why this is important. Describe the non-financial measures that should be considered and are important to the success of an organization. Explain why these measures should also be considered in the strategic initiatives of the organization ********************************* B6022 Module 5 Assignment 2 Required Assignment 2 Genesis Energy Capital Plan Report http://www.snaptutorial.com/B6022/product-36843-B6022- Module-5-Assignment-2-Required-Assignment-2-Genesis- Energy-Capital-Plan-Report For more classes visit www.snaptutorial.com

11. B6022 Module 5 Assignment 2 Required Assignment 2 Genesis Energy Capital Plan Report The Genesis Energy operations management team, nearing completion of its agreement with Sensible Essentials, was asked by senior management to present a capital plan for the operating expansion. The capital plan was not to be a wish list but an analysis of the necessary expenditures to successfully establish a fully equipped operating facility overseas. In addition, senior management requested meaningful financial and operating metrics to ensure that the performance objectives for the facility were being met. The operations management team was given five days to accomplish the following: Calculate the firm’s WACC. Prepare and analyze each planned capital expenditure. Evaluate, rank, and recommend the capital expenditures according to beneficial value to the organization, using the evaluation tools NPV, payback, and IRR. Evaluation, ranking, and recommendations should be by category of expenditures. For example, facility, equipment 1, 2, and 3, and inspection. Using the selected choices in part three, calculate the full cost of establishing a fully equipped facility. This would include the facility, equipment 1, 2, and 3, and inspection. In addition, calculate the payback, NPV, and IRR for the completed facility. Construct and recommend between three and five metrics to measure the performance of the organization. At least one metric should be dividend decision-making driven.

12. Prepare an executive summary along with a separate document showing the calculations. Part I Following the example of the operations management team, do the following: Download the Capital Budgeting spreadsheet, and compute the WACC for Genesis Energy. Using the information provided in the spreadsheet, analyze Genesis Energy’s project options. Then, calculate the periodic and cumulative net cash flows for each potential project and its associated options. Please note that there are five projects (facility, equipment pieces 1, 2, and 3, and internal inspection), and that each project offers multiple- configuration options (facility size, equipment type, etc.). Evaluate, rank, and recommend a specific option for each capital project according to beneficial value to the organization, using the evaluation tools NPV, payback, and IRR. Construct and recommend between three and five metrics to measure the performance of the new operating strategy. At least one metric should reflect dividend policy as it relates to rewarding shareholders. Prepare an executive summary describing your recommendations for each project and the overall cost, net cash flows, and expected returns of the operating configuration that you recommend. Be sure to justify your recommendations in terms of the investment criteria applied in Step 3 above. Be sure to report the full cost of the facility as it is configured per your recommendations. Present and justify your operating strategy performance metrics.

13. Your complete report should include all of your calculations as appendices (5 pages, or 1 page for each project). Part II—Executive Summary Presentation Because of limited resources in an era of plentiful opportunities, companies must carefully select investments. You analyzed Genesis Energy’s expansion plans and explained your findings in M5: Assignment 1. This assignment is based on those findings. In this assignment, you will create a PowerPoint presentation that will include the following information: An executive summary of your findings from M5: Assignment 1. Be sure to adhere to the following: The presentation should be approximately 6–8 minutes (or 10–12 slides). A statement of the problem or topic is included. A concise analysis of the findings is included. Specific details from M5: Assignment 1 to highlight or support the summary are incorporated. Develop a 10–12-slide presentation in PowerPoint format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M5_A2.ppt. ********************************* Module 1 Assignment 3 Calculating Inventory

14. For more classes visit www.snaptutorial.com B6021 Module 1 Assignment 3 Calculating Inventory Finlon Upholstery Inc. uses a job-order costing system to accumulate manufacturing costs. The company's work-in-process on December 31, 2001, consisted of one job (no. 2077), which was carried on the year-end balance sheet at $156,800. There was no finished-goods inventory on this date. Finlon applies manufacturing overhead to production on the basis of direct-labor cost. (The budgeted direct-labor cost is the company's practical capacity, in terms of direct-labor hours multiplied by the budgeted direct-labor rate.) Budgeted totals for 2002 for direct labor and manufacturing overhead are $4,200,000 and $5,460,000, respectively. Actual results for the year are as follows: Actual Results Direct Materials Used $5,600,000.00 Direct Labor $4,350,000.00

15. Indirect Material Used $65,000.00 Indirect Labor $2,860,000.00 Factory Depreciation $1,740,000.00 Factory Insurance $59,000.00 Factory Utilities $830,000.00 Selling and Administrative Expenses $2,160,000.00 Total $17,664,000.00 Job No. 2077 was completed in January 2002 and there was no work in process at year-end. All jobs produced during 2002 were sold with the exception of Job No. 2143, which contained direct-material costs of

16. $156,000 and direct-labor charges of $85,000. The company charges any under- or over-applied overhead to the cost of goods sold category. Using the above information, do the following: Calculate the company’s predetermined overhead application rate. Calculate the additions to the work-in-process inventory account for the direct material used, direct labor, and manufacturing overhead. Calculate the finished-goods inventory for the 12/31/01 balance sheet. Calculate the over-applied or under-applied overhead at year-end. Explain if it is appropriate to include selling and administrative expenses in the cost of goods sold category. Perform your calculations in an Excel spreadsheet and copy the calculations into a Word document. Your final product should be a 1- page paper in Word format. Apply APA standards to citation of sources. ***************************************** B6021 Module 2 Assignment 2 Borealis Manufacturing Company For more classes visit www.snaptutorial.com B6021 Module 2 Assignment 2 Borealis Manufacturing Company Borealis Manufacturing has just completed a major change in its quality control (QC) process. Previously, products had been reviewed by QC

17. inspectors at the end of each major process, and the company's 10 QC inspectors were charged to the operation or job as direct labor. In an effort to improve efficiency and quality, a computerized video QC system was purchased for $250,000. The system consists of a minicomputer, fifteen video cameras, and other peripheral hardware and software. The new system uses cameras stationed by QC engineers at key points in the production process. Each time an operation changes or there is a new operation, the cameras are moved, and a new master picture is loaded into the computer by a QC engineer. The camera takes pictures of the units in process, and the computer compares them to the picture of a “good” unit. Any differences are sent to a QC engineer, who removes the bad units and discusses the flaws with the production supervisors. The new system has replaced the 10 QC inspectors with two QC engineers. The operating costs of the new QC system, including the salaries of the QC engineers, have been included as factory overhead in calculating the company's plant-wide manufacturing-overhead rate, which is based on direct-labor dollars. The company's president is confused. His vice president of production has told him how efficient the new system is. Yet there is a large increase in the overhead rate. The computation of the rate before and after automation is as follows: Before After Budgeted Manufacturing Overhead 1,900,000 2,100,000 Budgeted Direct Labor Cost 1,000,000 700,000 Budgeted Overhead Rate 190% 300% “Three hundred percent,” lamented the president. “How can we compete with such a high overhead rate?” Using the module readings and the Argosy University online library resources, research manufacturing overhead. Review the situation. Complete the following:

18. •Define “manufacturing overhead,” and: ◦Cite three examples of typical costs that would be included in manufacturing overhead. ◦Explain why companies develop predetermined overhead rates. •Explain why the increase in the overhead rate should not have a negative financial impact on Borealis Manufacturing. •Explain how Borealis Manufacturing could change its overhead application system to eliminate confusion over product costs. •Describe how an activity-based costing system might benefit Borealis Manufacturing. ***************************************** B6021 Module 2 Assignment 2 Manufacturing Overhead For more classes visit www.snaptutorial.com B6021 Module 2 Assignment 2 Manufacturing Overhead Finlon Upholstery Inc. uses a job-order costing system to accumulate manufacturing costs. The company's work-in-process on December 31, 2001, consisted of one job (no. 2077), which was carried on the year-end balance sheet at $156,800. There was no finished-goods inventory on this date.

19. Finlon applies manufacturing overhead to production on the basis of direct-labor cost. (The budgeted direct-labor cost is the company's practical capacity, in terms of direct-labor hours multiplied by the budgeted direct-labor rate.) Budgeted totals for 2002 for direct labor and manufacturing overhead are $4,200,000 and $5,460,000, respectively. Actual results for the year are as follows: Actual Results Direct Materials Used $5,600,000.00 Direct Labor $4,350,000.00 Indirect Material Used $65,000.00 Indirect Labor $2,860,000.00 Factory Depreciation $1,740,000.00 Factory Insurance $59,000.00

20. Factory Utilities $830,000.00 Selling and Administrative Expenses $2,160,000.00 Total $17,664,000.00 Job No. 2077 was completed in January 2002 and there was no work in process at year-end. All jobs produced during 2002 were sold with the exception of Job No. 2143, which contained direct-material costs of $156,000 and direct-labor charges of $85,000. The company charges any under- or over-applied overhead to the cost of goods sold category. Using the above information, do the following: Calculate the company’s predetermined overhead application rate. Calculate the additions to the work-in-process inventory account for the direct material used, direct labor, and manufacturing overhead. Calculate the finished-goods inventory for the 12/31/01 balance sheet. Calculate the over-applied or under-applied overhead at year-end. Explain if it is appropriate to include selling and administrative expenses in the cost of goods sold category. Perform your calculations in an Excel spreadsheet and copy the calculations into a Word document. Your final product should be a 1- page paper in Word format. Apply APA standards to citation of sources. *****************************************

21. B6021 Module 3 Assignment 2 LASA 1 Cost and Decision-Making Analysis For more classes visit www.snaptutorial.com B6021 Module 3 Assignment 2 LASA 1 Cost and Decision-Making Analysis Cost and Decision-Making Analysis Cheryl Montoya picked up the phone and called her boss, Wes Chan, Vice President of Marketing at Piedmont Fasteners Corporation. Cheryl: “Wes, I'm not sure how to go about answering the questions that came up at the meeting with the President yesterday.” Wes: “What's the problem?” Cheryl: “The president wanted to know the break-even point for each of the company's products, but I am having trouble figuring them out.” Wes: “I'm sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp in time for the follow-up meeting at 9:00.”

22. Piedmont Fasteners Corporation makes three different clothing fasteners at its manufacturing facility in North Carolina. Data concerning these products appear below: Velcro Metal Nylon Normal annual sales volume 100, 000 units 200,000 units 400,000 units Unit selling price $1.65 $1.50 $0.85 Variable cost per unit $1.25 $0.70

23. $0.25 Total fixed expenses are $400,000 per year. All three products are sold in highly competitive markets, so the company is unable to raise its prices without losing unacceptably large numbers of customers. The company has a very effective lean production system, so there is no beginning or ending work in process or finished-goods inventories. Using the module readings, the Argosy University online library resources, and the Internet, research break-even point and costing systems. Analyze the case based on your research and what you have learned so far in the course. Respond to the following: Calculate the company's overall break-even point in total sales dollars. Explain your methodology. Of the total fixed costs of $400,000: $20,000 could be avoided if the Velcro product were dropped, $80,000 if the Metal product were dropped, and $60,000 if the Nylon product were dropped. The remaining fixed costs of $240,000 consist of common fixed costs such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely (approximately 2 pages): Calculate the break-even point in units for each product. Explain your methodology. Determine the overall profit of the company if the company sells exactly the break-even quantity of each product. Present your results.

24. Evaluate costing systems for this company. Explain if this company should be using a job order or process-costing system to accumulate costs (1 page). Your final product will be a Word document, approximately 5-6 pages in length. Apply APA standards to citation of sources. Be sure to include your calculations in Microsoft excel format. ***************************************** B6021 Module 4 Assignment 2 Applying Decision-Making Skills For more classes visit www.snaptutorial.com B6021 Module 4 Assignment 2 Applying Decision-Making Skills As a manager, part of your role is to develop strategy, and share this strategy with various stakeholders within the organization. This assignment will allow you to take your findings as a manager and communicate these findings to those who are affected. Your company has been presented with a decision on replacing a piece of equipment for a new computerized version that promotes efficiency for the upcoming year.

25. As manager you will need to decide whether or not the purchase of the new equipment is a worthwhile investment and to communicate your recommendations to Executive Management for a final decision. To be convincing, sufficient support for your recommendations must be provided in order to be considered valid and accepted. Existing Equipment Original Cost 60,000 Present Book Value 30,000 Annual Cash Operating Costs 145,000 Current Market Value 15,000 Market Value in Ten Years 0 Remaining useful Life 10 years Replacement Equipment Cost 600,000 Annual Cash Operating Costs 50,000 Market Value in Ten Years 0 Useful Life 10 years Other Information Cost of Capital 10% Payback requirement 6 years In this assignment, use the information above to develop a comprehensive analysis using NPV, Payback Method, and IRR to develop a recommendation on replacing the existing equipment with a new computerized version. Develop an executive summary of your findings in a Microsoft PowerPoint presentation format to present to Executive Management. Do the following in your presentation:

26. Include a statement of the problem or topic, a concise analysis of the findings, and a recapitulation of any main conclusions or recommendations. Be sure to incorporate specific details to highlight or support the summary including calculations. Using your knowledge of capital budgeting techniques, explain how principles of capital budgeting, such as the payback method, IRR, and NPV, can be used to assess the potential projects and assist in the decision-making process. Develop a 10-12 slide presentation in PowerPoint format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M4_A2.ppt. ***************************************** B6021 Module 5 Assignment 2 LASA 2 Manufacturing Budget Analysis For more classes visit www.snaptutorial.com B6021 Module 5 Assignment 2 LASA 2 Manufacturing Budget Analysis

27. Tom Emory and Jim Morris strolled back to their plant from the administrative offices of Ferguson & Son Manufacturing Company. Tom is manager of the machine shop in the company's factory; Jim is manager of the equipment maintenance department. The men had just attended the monthly performance evaluation meeting for plant department heads. These meetings had been held on the third Tuesday of each month since Robert Ferguson, Jr., the president's son, had become plant manager a year earlier. As they were walking, Tom Emory spoke: “Boy, I hate those meetings! I never know whether my department's accounting reports will show good or bad performance. I'm beginning to expect the worst. If the accountants say I saved the company a dollar, I'm called ‘Sir,’ but if I spend even a little too much—boy, do I get in trouble. I don't know if I can hold on until I retire.” Tom had just been given the worst evaluation he had ever received in his long career with Ferguson & Son. He was the most respected of the experienced machinists in the company. He had been with the company for many years and was promoted to supervisor of the machine shop when the company expanded and moved to its present location. The president (Robert Ferguson, Sr.) had often stated that the company's success was due to the high-quality work of machinists like Tom. As supervisor, Tom stressed the importance of craftsmanship and told his workers that he wanted no sloppy work coming from his department. When Robert Ferguson, Jr., became the plant manager, he directed that monthly performance comparisons be made between actual and budgeted costs for each department. The departmental budgets were intended to encourage the supervisors to reduce inefficiencies and to seek cost reduction opportunities. The company controller was instructed to have his staff “tighten” the budget slightly whenever a department attained its budget in a given month; this was done to

28. reinforce the plant manager's desire to reduce costs. The young plant manager often stressed the importance of continued progress toward attaining the budget; he also made it known that he kept a file of these performance reports for future reference when he succeeded his father. Tom Emory's conversation with Jim Morris continued as follows: Emory: I really don't understand. We've worked so hard to meet the budget, and the minute we do so they tighten it on us. We can't work any faster and still maintain quality. I think my men are ready to quit trying. Besides, those reports don't tell the whole story. We always seem to be interrupting the big jobs for all those small rush orders. All that setup and machine adjustment time is killing us. And quite frankly, Jim, you were no help. When our hydraulic press broke down last month, your people were nowhere to be found. We had to take it apart ourselves and got stuck with all that idle time. Morris: I'm sorry about that, Tom, but you know my department has had trouble making budget, too. We were running well behind at the time of that problem, and if we had spent a day on that old machine, we would never have made it up. Instead, we made the scheduled inspections of the forklift trucks because we knew we could do those in less than the budgeted time. Emory: Well, Jim, at least you have some options. I'm locked into what the scheduling department assigns to me and you know they're being harassed by sales for those special orders. Incidentally, why didn't your report show all the supplies you guys wasted last month when you were working in Bill's department? Morris: We're not out of the woods on that deal yet. We charged the maximum we could to other work and haven't even reported some of it yet.

29. Emory: Well, I'm glad you have a way of getting out of the pressure. The accountants seem to know everything that's happening in my department, sometimes even before I do. I thought all that budget and accounting stuff was supposed to help, but it just gets me into trouble. It's all a big pain. I'm trying to put out quality work; they're trying to save pennies. Review the case. Respond to the following: Identify the problems that appear to exist in Ferguson & Son Manufacturing Company's budgetary control system and explain how the problems are likely to reduce the effectiveness of the system. Explain how Ferguson & Son Manufacturing Company's budgetary control system could be revised to improve its effectiveness. Explain how the use of an activity-based costing system could change the results of the budget, if utilized. As stated in the case, many employees have “quit trying” and have altered behavior on the job. Provide specific ways for how one would use a budget to change employee behavior and align goals in the organization. Explain how goal alignment can improve profitability and overall return to the shareholders of the company. Synthesize data to explain the concept of ROI and describe how the use of an activity-based costing system can improve the company’s ROI and the potential impact on free cash flow. Write a 6–8 page report in Word format. Apply APA standards to citation of sources. *****************************************