Unit 6 Discussion Cost

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Part 1

How does the strategic plan influence preparation of the master budget?  How does budgeting provide important information to managers and operating personnel?  Explain how High Sierra uses the 80/20 rule, along with its budgeting process, to make major decisions to improve future profitability.  Be sure to include the types of decisions a company might make based on budgets.


Part 2

The cash budget and the budgeted statement of cash flows both provide information about cash.  What information about cash is common to these two sources, and what information is unique to the two sources?  Assume that in preparing the cash budget, the accountant discovers that a cash shortage will likely occur in a specific month.  What actions might the accountant recommend to management to deal with the cash shortage?


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