Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: The director of marketing for Mobile Computer Co., Sheri Keller had the following discussion with the company controller Isaiah Johnson, on July 26 of the current year:

Sheri: Isaiah, it looks like I'm going to spend much less than indicated on my July budget.

Isaiah: I'm glad to hear it.

Sheri: Well, I am not so sure it's good news I am concerned that the president will see that I'm under budget & reduce my budget in the future. The only reason that l look good is that we've delayed an adverting campaign once the campaign hits in September, I'm sure my actual expenditures will go up. You see, we are also having our sales convention in September. Having the adverting campaign & the convention at the same time is going to kill my September numbers.

Isaiah: I don't think that's anything to worry about We all expect some variation on actual spending month to month. What’s really important is staying with the budgeted targets for the year. Does that look as if it’s going to be a problem?

Sheri: I don't think so, but just the same, I’d like to be on the safe side

Isaiah: What do you mean?

Sheri: Well this is what I'd like to do. I want to pay the convention-related costs in advance this month. I'll pay the hotel for room & convention space & purchase the airline tickets in advance. In this way I can charge all these expenditures to July's budget. This would cause my actual expenses to come close to budget for July. Moreover when the big advertising campaign hits in September, I won't have to worry about expenditures for the convention on my September budget as well. The convention costs will already be paid. Thus, my September expenses should be pretty close to budget.

Isaiah: I can't tell you when to make your convention purchases but I'm not too sure that it should be expensed on July's budget.

Sheri: What is the problem? It looks like "no harm, no foul" to me. I can't see that there's anything wrong with this-it's just smart management.

How should Isaiah Johnson respond to Sheri: Keller's request to expense the advanced payments for convention related loss against July's budget?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M916546

Have any Question? 


Related Questions in Basic Finance

1 what is the law of one price how is it related to the

1. What is the law of one price? How is it related to the theory of purchasing power parity (PPP)? 2. Is PPP a theory of exchange rate determination in the long run or in the short run? 3. According to the theory of purc ...

What is the expected relationship between dividend payout

What is the expected relationship between dividend payout levels and the growth rate and availability of positive-NPV projects, under the agency cost model of dividends? What about the expected relationship between divid ...

Lew started a business writing a popular syndicated

Lew started a business writing a popular syndicated Japanese gardening column the current year (2015) will report a profit for his first year. His results of operations are as follows ; (Use schedule C). Gross income $38 ...

Explain the difference between a short hedge and a long

Explain the difference between a short hedge and a long hedge ? a. What is the basis? b. How is the basis expected to change over the life of a futures contract? c. Explain why a strengthening basis benefits a short hedg ...

Suppose that you observe a european call option that is

Suppose that you observe a European call option that is priced at less than the value Max[0, S0 - X(1 + r)-T ]. What type of transaction should you execute to achieve the maximum benefit? Demonstrate that your strategy i ...

Find two variables that you think should be either

Find two variables that you think should be either positively or negatively correlated. Measure these two variables in a sample of participants (for instance, your classmates). Calculate the Pearson correlation coefficie ...

1 explain how replication can be conceptualized as a

1. Explain how replication can be conceptualized as a factorial experimental design. 2. Why are research programs more important to the advancement of science than are single experiments? 3. Define a meta-analysis, and e ...

Assignmentanswer questions-what are the two principal ways

Assignment Answer questions: -What are the two principal ways in which Congress and state legislatures exercise oversight of administrative agencies? -In what ways does the budgeting process lend itself to political cont ...

6 cs of credit as defined by the author look at each one

6 C's of credit, as defined by the author. Look at each one and evaluate its merit. Pick two of the six and explain why you think it is vital that an underwriter would use this and how. Finally, pick which of the six you ...

1 what are derivatives2 what is the difference between

1. What are derivatives? 2. What is the difference between hedging and speculating? 3. Why might a corn farmer want to hedge against volatile corn prices? 4. Would derivatives markets be better off if the only people buy ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro