If the sales outlook for the coming three years was only 20,000,000 and B.E. continued producing at the rate of 30,000,000 units, a total of 10,000,000 units would be dumped into ending inventory at the end of each year once again reducing costs of goods sold and falsely increasing income. By the end of year 2013, B.E. Company would have 35,000,000 units sitting in ending inventory taking up space and costing money to store. Once again if the president’s bonus is based off of net income, this situation is the most favorable for a high paying bonus and encourages stockpiling inventory to inflate net income.
This reduces the carrying costs of the inventory that is ordered as well as insuring that unused items are not held from month to month. A third way to increase working capital is to realign the billing and payment schedules for the company. Currently products are invoiced to customers at the end of the month with terms of net30. Suppliers invoice the company at the end of the month with terms of net15. This disparity of terms can impact working capital as money flows out in the middle of the month but does not flow in until the end of the month.
Incremental budgeting is when you take last year’s budget and add more or less to it depending on what you’re looking to do with your budget for the year. Some companies like this budget because if you’re meeting your budget every year it will stay the same. If you don’t use your budget it will reduce the next year. Some people
They gave a good estimate of how my decisions would affect business performance for the upcoming quarter. I was able to look at the pro-forma statements and make adjustments in my decisions before moving into the next quarter. For example, in quarter 2, I had decided to not add another sales site due to not having enough cash on hand. After looking over the pro-forma statements, I realized that I would have enough money to add another location for the next quarter and still have more than $300,000 cash left over at the end of the quarter. Operating efficiency was improved using just-in-time and lean operations techniques.
(3-6 sentences. 2.0 points) 6 months because I might loose my job. It will make me go into my financial reserve. Another thing that could make me go into financial reserve is having to pay medical bills .Somebody getting sick in the family. 3.
Initially, for at least the first few months, there will be a lag between what we have available and what the customers or clients know we stock. This could cause decreased inquiries or sales of the specific new models until updated marketing materials are distributed and the website is updated. Another potential risk is the longevity, or “shelf-life” of both the pediatric and bariatric models. We expect there to be increased “wear and tear” for both models, which could reduce the rentable time by 5-10 weeks, decreasing the profit for the rental models. Lastly, increased inventory requires more space.
But there are still a possibility that problems can rise which could have a massive effect on the business if they are left alone. But as said above as the budget can be monitored on a monthly basis it allows the business to change how the business performances to give them a chance to save the business before it goes bankrupt. But by setting a budget and monitoring the budget it gives the business an idea of what the expected to earn and buy each month at at the end of the year as a whole. Also as said above by monitoring the budget it gives the business an idea of where the business is in relation to the forecasted
C) The answers are different because if the interest is left untouched, it makes the principal amount higher each year, giving more money after 10 years. Compounded interest allows for more money that simple interest would. 2. A) If the individual retires at the age of 65, having started the program at age 40, there would be $219,318 in the account. $3,000 x (8% in 25 years) 3000 x 73.106 = $219,318 B) If
(3-6 sentences. 2.0 points) I believe that at least three months worth of my expenses should go towards my financial reserve. I think this is a good idea because this will leave enough money for me to afford major financial loss. If there is an emergency that is costly, three months worth of expenses should be able to pay for the damages. 3.
(3-6 sentences. 2.0 points) • I believe that at least three months worth of my expenses should go towards my financial reserve. I think this is a good idea because this will leave enough money for me to afford major financial loss. If there is an emergency that is costly, three months worth of expenses should be able to pay for the damages. 3.