Budgeting is a critical operational component of a manager’s duties. The implication of proper budgeting is
that it alows companies to effectively plan for the management of resources within the context of product
and goods delivery, while not losing sight of the need for cash flow. This concept will be reviewed again
later in this course; in the meantime, cash flow is critically important to the health of a business. Being able
to budget within the constraints of estimated and actual cash flow allows companies to spend no more than
needed in operational functions for purchasing, producing, and delivering goods and services.

Act as the warehouse manager for Tandy Leather Factory. You have been
asked to present a quarterly budget and financial plan to the president of the company. To do this, you will
need to examine last year’s financial statements, last quarter’s earnings, and this quarter’s estimated
sales. You will use market analysis from Yahoo! Finance and the annual earnings report from last year. You
will create a presentation of the budget using Microsoft PowerPoint. Your presentation should cover the
cost of managing the inventory, shipping, warehouse machine maintenance (forklifts, pallet jacks, pallet
wrapping machines, computers, handheld inventory devices, etc.), personnel costs for 75 employees, two
office clerks, and two managers. Your budget will be based on an 8-hour work day, 5 days a week. You
must include the cost for a 1-day shutdown of the warehouse for a quarterly inventory count.

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