Accounting for Decision Makers -Discussion Question Assignment - 4

Accounting for Decision Makers -Discussion Question - Assignment Example As an example for the second item, if the highest budget value was $154967 while the required budget for next year is less than that, this is a slack. The third item will create a budgetary slack because more money will be used to correct the situation. If $5400 gave the poor results, more dollars will be needed next year. Including depreciation value in the purchase budget will increase cost slightly: this is a slack too. For example if equipment costs $392 today while its charge is $8, the budgeted cost then becomes $400. Inflation rate and fixed cost to the estimates of purchase will slight relax the budget: for example budgeting with $450 for a facility that costs $400 today. Lastly, new employees require higher cost to make labor efficient. Using this cost for approximation of labor efficiency would create a slack. An example would be budgeting for an average $211 for labor efficiency of new employees while only about $110 dollars would be used for the same. I believe Bailey can justify the built-in budgetary slack to the company. The manager may need to explain would benefit the company like preventing frequent returns to the budgeting table or frequent withdrawal of projects. I would suggest for Bailey to improve the company’s budgeting by use of automated systems such as excel spreadsheets for budgeting and driver-based metrics (Hartgraves & Morse, 2015). In addition, honesty between departments and management should be maintained so that none is taken for a