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When budgeted sales are not achieved, each area is expected to cut<br />
costs so that the president's profit target can be met. However, the<br />
profit target is seldom met because costs are not cut enough.<br />
In fact, costs often run above the original budget in all functional areas<br />
(marketing, production, <strong>and</strong> corporate office).<br />
The president is disturbed that Palmer has not been able to meet the<br />
sales <strong>and</strong> profit targets.<br />
He hired a consultant with considerable experience with companies in<br />
Palmer's industry. The consultant reviewed the budgets for the past 4<br />
years. He concluded that the product line sales budgets were<br />
reasonable <strong>and</strong> that the cost <strong>and</strong> expense budgets were adequate for<br />
the budgeted sales <strong>and</strong> production levels.<br />
Instructions<br />
(a) Discuss how the budgeting process employed by Palmer<br />
Corporation contributes to the failure to achieve the president's sales<br />
<strong>and</strong> profit targets.<br />
(b) Suggest how Palmer Corporation's budgeting process could be<br />
revised to correct the problems.<br />
(c) Should the functional areas be expected to cut their costs when<br />
sales volume falls below budget? Explain your answer.<br />
Read More Courses Here.………… <strong>ACC</strong> <strong>561</strong> Week 5 DQ 1 | <strong>ACC</strong> <strong>561</strong><br />
Week 5 DQ 2 | <strong>ACC</strong> <strong>561</strong> Week 5 Quiz | <strong>ACC</strong> <strong>561</strong> Week 5 WileyPLUS<br />
Assignment | <strong>ACC</strong> <strong>561</strong> Week 5 Budgeting Assignment | <strong>ACC</strong> <strong>561</strong> Week<br />
5 Learning Team Assignment