Maria Mendez is division controller andJames Dalton is division manager of the Hestor Shoe Company. Mendez has line responsibility to Dalton,but she also has staff responsibility to the company controller.Dalton is under severe pressure to achieve the budgeted division income for the year. He has askedMendez to book $200,000 of revenues on December 31. The customers’ orders are firm, but the shoes arestill in the production process. They will be shipped on or around January 4. Dalton says to Mendez, “Thekey event is getting the sales order, not shipping the shoes. You should support me, not obstruct my reachingdivision goals.” What should Mendez do if Dalton gives her a direct order to book the sales?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Maria Mendez is division controller and
James Dalton is division manager of the Hestor Shoe Company. Mendez has line responsibility to Dalton,
but she also has staff responsibility to the company controller.
Dalton is under severe pressure to achieve the budgeted division income for the year. He has asked
Mendez to book $200,000 of revenues on December 31. The customers’ orders are firm, but the shoes are
still in the production process. They will be shipped on or around January 4. Dalton says to Mendez, “The
key event is getting the sales order, not shipping the shoes. You should support me, not obstruct my reaching
division goals.” What should Mendez do if Dalton gives her a direct order to book the sales?
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