User Account

All Pages

When the budget was almost complete dunn asked the

Assignment Help Accounting Basics
Reference no: EM13485402

Residence Suites operates a regional hotel chain. Each hotel is operated by a manager and an assistant manager/controller. Many of the staff who run the front desk, clean the rooms, and prepare the breakfast buffet work part-time or have a second job, so turnover is high.

Assistant manager/controller Terry Dunn asked the new financial assistant to help prepare the hotel's master budget. The master budget is prepared once a year and submitted to company headquarters for approval. Once approved, the master budget is used to evaluate the hotel's performance. These performance evaluations affect hotel managers' bonuses; they also affect company decisions about which hotels deserve extra funds for capital improvements.

When the budget was almost complete, Dunn asked the financial assistant to increase amounts budgeted for labor and supplies 15%. When asked why, Dunn responded that hotel manager Clay Murry told her to do this when she began working at the hotel. Murry explained that this budgetary cushion gave him flexibility in running the hotel. For example, because company headquarters tightly controls capital improvement funds, Murry can use the extra money budgeted for labor and supplies to replace broken televisions or to pay ‘bonuses' to keep valued employees. Dunn initially accepted this explanation because she had observed similar behavior at her previous place of employment.

Put yourself in Dunn's position. In deciding how to deal with the situation, answer the following questions:

a) What problems exist in the budget preparation process?

b) What is the ethical issue?

c) What are the possible consequences of the current state of affairs?

d) Explain what Dunn should do.

Reference no: EM13485402

Questions Cloud

By how much will bkfcoms monthly profits change if they : bkf.com provides banks access to sophisticated financial information and analysis via the web enabling them to
Prepare separate properly labeled schedules detailing the : the company purchased land with a building for 1250000. at the time of the purchase the fair value of the land was at
No entry has been made to remove from the accounts for : below are transactions related to impala company.a the city of pebble beach gives the company 5 acres of land as a
Why is it sometimes misleading to compare a companys : why is it sometimes misleading to compare a companys financial ratios with other firms that operate in the same
When the budget was almost complete dunn asked the : residence suites operates a regional hotel chain. each hotel is operated by a manager and an assistant
Why ebit is generally considered to be independent of : why ebit is generally considered to be independent of financial leverage? why might ebit actually be influenced by
Identify each of the following responsibility centers as a : identify each of the following responsibility centers as a cost center a revenue center a profit center or an
A company makes power tools the motor division makes a : a company makes power tools. the motor division makes a motor that small tools division needs for a new product. the
Why do us corporations build manufacturing plants abroad : why do u.s. corporations build manufacturing plants abroad when they can build them at

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare schedule of costs of good

Your schedule and statement must be in proper form - this means they should look like they would in an annual report-Prepare a schedule of cost of goods manufactured in good form.

  Break-even point will increase or decrease

Mark Company currently sells a video recorder with a selling price of $300 per unit. The variable expense per unit is $175 and fixed expenses are $100,000. If the company reduces variable expenses by $20 per unit and increases the fixed expenses b..

  Wyatt co has budgeted the following unit

wyatt co. has budgeted the following unit sales2011nbspnbspnbspnbspnbspnbspnbspnbsp

  Calculate the estimated inventory

In addition, the controller is aware of $10,000 of inventory that was stolen during August from one of the company's warehouses. Calculate the estimated inventory at the end of August, assuming a markup on cost of 25%.

  Dollars at the departure date

what amount of gain or a loss did she experience on the 50,000 pesos she held during her visit and converted to u.s. dollars at the departure date?

  Surviving spouse gross estate

Ernie's executor elects to claim the marital deduction for the QTIP transfer. At the time of the surviving spouse's death, the value of the QTIP trust is $3.6 million. The amount of the QTIP trust included in the surviving spouse's gross estate is..

  Describe the primary advantages and disadvantages of

discuss the primary advantages and disadvantages of applying the direct write-off and the allowance method of writing

  Occurance of future taxable amount

At the December 31, 2007 balance sheet date, Garth Brooks Corporation reports an accrued receivable for financial reporting purposes but not for tax purposes. When this asset is recovered in 2008, a future taxable amount will occur and

  What was the total amount of bad debts expense

As a result of a comprehensive analysis, it is determined that the December 31, 2011 balance of Allowance for Bad Debts should be $6,300. Show, in general journal format the adjustment required.

  Compare and contrast an income statement and a balance

compare and contrast an income statement and a balance sheet. what do they measure? why would a marketing manager find

  Predetermined overhead rate based on machine hours

Suppose that Wolfe were to use a single, predetermined overhead rate based on machine hours. Compute the rate per hour and the total overhead assigned.

  Risks and liability factors in an audit

What are the risks and liability factors in an audit? What are the implications to the auditor? What are the implications to the organization? How can the auditor mitigate these risks and liability factors?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd