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Essay / Research Paper Abstract
A 4 page paper answering four questions about the
budgeting process at Vershire Company. Vershire Company strives to gain a high degree of accuracy, incorporating many unnecessary steps in the process and holding production managers accountable for the performance of non-production departments (i.e., sales). Bibliography lists 2 sources.
Page Count:
4 pages (~225 words per page)
File: CC6_KSmgmtVers.rtf
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Unformatted sample text from the term paper:
systems Strengths "The budget was used as the primary tool to direct each divisions efforts towards common corporate objectives" (Chitkara, Govindarajan Anthony, n.d.;
p. 2). The process of devising a final budget for the upcoming year for the entire organization begins with each department establishing a target budget for themselves. These
departmental budgets are based on previous and current years budgets and include allowance for growth during the upcoming year. Departmental budgets are combined to create division budgets, which in
turn are combined to create an overall financial target for the organization for the upcoming year. The smallest of units of the organization operate within the limits of several
budgets. Depending on the unit, there can be operations, capital and cash budgets and the unit will need to make projections for each one for the upcoming year.
The same is true for larger business units and ultimately for the organization. The central market research staff fine-tunes the information supplied by
divisional managers, adding economic outlook estimates and information regarding industry trends. The next years sales forecasts are not merely the creation of divisional managers without also considering external conditions.
Once approved, any budget forecast changes must be agreed to by all parties involved in the specific area of the company. Weaknesses
"In May, each divisional general manager submitted a preliminary report to corporate management summarizing the outlook for sales, income and capital requirements for the
next budget year, and evaluating the trends anticipated in each category over the subsequent two years" (Chitkara, Govindarajan Anthony, n.d.; pp. 2-3). Forecasting the future is a prime component
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