MAN 4330 Exam 3 Complete Guide (100 out
of 100) Questions and Verified Solutions
(Latest Update)
What are the benefits of Budgeting?
1. Control of your Expenses (Revenue Ratio)
Expenses > Revenue = LOSSES
2. Coordinate Activities (Budget for ALL Departments and activities) Develop a budget for all major HR
3. Set some performance standards (Goal for Sales and Operational Budgets)
4. Evaluation Tool (Deviation Analysis +- Comparison to actual results to planned (budgeted)
5. Corrective & Remedial control (Take necessary action to prevent future over expenditures or under
sales forecast)
What is the Budgeting Process?
-All starts with Revenue Projections! Forecasts!
- Effects available resources for all business activities- very difficult process but critical~
- UNDERSTAND YOUR CHALLENGES/Role of Assumptions- explains the reasoning to determine the
budget
What is MEA?
Used to identify the issues such as economic activity, competitive activity, market
expectations/demands, pricing tech development
,What is part of the budgeting process?
Develop complete charts of accounts
Research costs for each account
Develop a written budget for each account
Avoid straight line estimating
Forecasts sales volume
Relate to revenue and projected profits to HR requirements
Project best case/worst case scenarios
Project break-even budget point
Forecasting Revenue- Sales or budget Allocations
Minimum Budget- determines the minimum costs for each activity to meet perform. requirements
Must do Budget- minimum revenue to survive
2 common Budget Approaches
Bottom Up- determine the cost for each activity and sum them to determine Revenue needs
Top down- begin with estimate (or available) revenue and allocate to the business activities
Forecasting compensation Budgets: A process view
- Determine pay of present employees
- Calculate total compensation for present employees (salary + benefit rider)
-Estimate (forecast) present employee total compensation for the next year
,-Include forecasted pay adjustments and possible bonuses to occur during the year
-Calculate total compensation costs for additional new positions!
-Total all comp costs
Who are Special Groups?
Supervisors,
Professional employees,
Sales Staff,
Contingent Workers,
Corporate directors,
Top Management Executives
Characteristics of Special Groups:
-Tend to be strategically important to a company
- Positions tend to have conflict, that comes up bc different situations place incompatible demands on
members of group
The Issues of Supervisory Pay:
Caught between demands of: -Upper management in terms of production and employees in terms of
rewards, reinforcements and counseling
Major Challenge in paying supervisors
-Equity
- Provide incentives to attract nonexempt employees to accept challenges of being a supervisor
, Pay Strategies:
-Key base salaries of supervisors to an amount exceeding highest paid employee (Salaries of supervisors
should be Higher than the highest paid employee)
- Pay supervisors for scheduled overtime
The Trend in supervisory compensation
- Increased use of variable pay
- More than half of all companies have a variable pay component for supervisors.
Conflicts faced by Sales Staff:
- Often go for extended periods in field with little supervision
Challenges of Sales staff are:
-Staying motivated
-Continuing to make sales calls despite little supervision
Reward components of Professional employees:
-Dual Career ladder
-Maturity curve pay plans
-Performance based incentives (profit sharing, stock ownership)
-Bonuses
-Perks
of 100) Questions and Verified Solutions
(Latest Update)
What are the benefits of Budgeting?
1. Control of your Expenses (Revenue Ratio)
Expenses > Revenue = LOSSES
2. Coordinate Activities (Budget for ALL Departments and activities) Develop a budget for all major HR
3. Set some performance standards (Goal for Sales and Operational Budgets)
4. Evaluation Tool (Deviation Analysis +- Comparison to actual results to planned (budgeted)
5. Corrective & Remedial control (Take necessary action to prevent future over expenditures or under
sales forecast)
What is the Budgeting Process?
-All starts with Revenue Projections! Forecasts!
- Effects available resources for all business activities- very difficult process but critical~
- UNDERSTAND YOUR CHALLENGES/Role of Assumptions- explains the reasoning to determine the
budget
What is MEA?
Used to identify the issues such as economic activity, competitive activity, market
expectations/demands, pricing tech development
,What is part of the budgeting process?
Develop complete charts of accounts
Research costs for each account
Develop a written budget for each account
Avoid straight line estimating
Forecasts sales volume
Relate to revenue and projected profits to HR requirements
Project best case/worst case scenarios
Project break-even budget point
Forecasting Revenue- Sales or budget Allocations
Minimum Budget- determines the minimum costs for each activity to meet perform. requirements
Must do Budget- minimum revenue to survive
2 common Budget Approaches
Bottom Up- determine the cost for each activity and sum them to determine Revenue needs
Top down- begin with estimate (or available) revenue and allocate to the business activities
Forecasting compensation Budgets: A process view
- Determine pay of present employees
- Calculate total compensation for present employees (salary + benefit rider)
-Estimate (forecast) present employee total compensation for the next year
,-Include forecasted pay adjustments and possible bonuses to occur during the year
-Calculate total compensation costs for additional new positions!
-Total all comp costs
Who are Special Groups?
Supervisors,
Professional employees,
Sales Staff,
Contingent Workers,
Corporate directors,
Top Management Executives
Characteristics of Special Groups:
-Tend to be strategically important to a company
- Positions tend to have conflict, that comes up bc different situations place incompatible demands on
members of group
The Issues of Supervisory Pay:
Caught between demands of: -Upper management in terms of production and employees in terms of
rewards, reinforcements and counseling
Major Challenge in paying supervisors
-Equity
- Provide incentives to attract nonexempt employees to accept challenges of being a supervisor
, Pay Strategies:
-Key base salaries of supervisors to an amount exceeding highest paid employee (Salaries of supervisors
should be Higher than the highest paid employee)
- Pay supervisors for scheduled overtime
The Trend in supervisory compensation
- Increased use of variable pay
- More than half of all companies have a variable pay component for supervisors.
Conflicts faced by Sales Staff:
- Often go for extended periods in field with little supervision
Challenges of Sales staff are:
-Staying motivated
-Continuing to make sales calls despite little supervision
Reward components of Professional employees:
-Dual Career ladder
-Maturity curve pay plans
-Performance based incentives (profit sharing, stock ownership)
-Bonuses
-Perks
