Account for Management Decision Making
Week 1 Assignment
Using Accounting Information for Decision Making- Financial Information and Budgets
For this Assignment, you will take on the role of a consultant and provide two reports on using accounting information for decision making to a fictitious organization so it can better prepare for the future. This week, you will submit the first report, which will focus on financial information and budgeting. Next week, you will submit the second report, which will focus on performance reports and balanced scorecards.
AMcarParts, Inc., a midsize manufacturer of after-market automotive parts, has had an unexpected amount of turnover in its leadership staff, leaving the owners in need of someone who can help them understand accounting concepts, such as strategic planning, budgeting, and forecasting. You have been hired as a consultant to help the owners understand this information for future planning and to assist them with some immediate budgeting needs and concerns.
The product of your analysis will be a business report on using accounting information for decision making that will be delivered to the owners of a midsize manufacturer. In addition to the requirements that follow, be sure to incorporate references to appropriate academic sources, such as those found in this week’s Learning Resources or those in the Walden Library.
To prepare for this Assignment:
- Download Week 1 Part 1 Assignment Template.
- Download Week 1 Part 2 Assignment Template.
- Your instructor will provide part of the data to complete the calculations for the “Budget Preparation” part of this week’s Assignment. To access that information, refer to Doc Sharing.
Submit your completed business report and accompanying Excel file. Your report should be 4–5 pages in length (excluding title page and references) and should address the following:
For this part of your business report, you are to provide an analysis on financial statements, strategic planning, budgeting, and forecasting. In the context of this Assignment, the organization’s leaders would use this information to develop their draft budget, which they would then provide to you for the budget preparation. In your analysis, address the following:
- Describe the four basic financial statements—income statement, statement of stockholders’ equity, statement of financial position (also known as a balance sheet), and statement of cash flows—and the purpose of each.
- Compare the concepts of strategic planning, budgeting, and forecasting for an organization. Specifically:
- Describe each concept and the ways they are interrelated as well as their differences.
- Analyze the role that each concept plays within an organization. In your analysis, be sure to include how strategic planning, budgeting, and forecasting are used to improve organizational performance.
- Be sure to include citations and references to support your work.
- Explain what responsibility centers are (in general) as well as the three types of responsibility centers: cost centers, profit centers, and investment centers.
- Identify the decision rights assigned to each type of center, being sure to include examples for each type of responsibility center.
For this part of your business report, you will prepare a budget in Excel and demonstrate how it was developed. You will use the organization’s year-end income statement and ideas the company has for the upcoming year. Be sure to address the following:
- Using the Week 1 Part 2 Assignment Template and the data provided by your Instructor in the Doc Sharing area, prepare a budget of the upcoming year for the organization.
- Illustrate to the organization how each line item in the budget was prepared. (Note: You will include these notes in the indicated cells within the Assignment Template.)
- Note: In addition to submitting your work in Excel, you will insert your budget and your notes into your main document. For information on inserting data from Excel into Word, refer to the following: