Vershire Company Essay

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Case 1: 4-1 Vershire Company 1. There are 6 steps in the budget process of Vershire Company which are: Step 1: Sales Budget is prepare in May which divided into plant, price, volume and product. In this step the Divisional General Manager will compile the sales budget which input is requested from the district sales managers and central market research staff. Step 2: In September, the Plant Manager is given sales budget which include gross profits, fixed expenses and pre-tax income. In this step plant manager also set budget standards for variable and fixed cost which from compilation of the industrial Engineering Department about the cost standards and cost reduction targets. Step 3: Head Office visit the plant and review with the plant manager of the budget prior to submission of the budget to Division General Manager. Step 4: The budget is received by GM for review if any revision is needed. Step 5: In Decemeber, the CEO received the approve budget from the GM for review and and request any modification if needed before submit it to the Board of Directors. Step 6: The Board Directors received and review the budget for final approval. Step 3 should be eliminated as the budget process takes longer time to complete which took another 3 months. Furthermore, visiting by the HQ controllers makes the plant managers submissions of the budget seem a bit top down. Since the plant manager had the most knowledge of the operations, they should determine any areas for additional savings. The overall process of the budget took about 8 months which is from May until completion in December. The Company may implement a rolling budget where is help to constantly look to the future and revise our estimates. 2. According to Exhibit 1, the Aluminium Can Division of Vershire Company is headed by a General Manager. There are two line managers who are heading the

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