TUGAS CASE 1

MM5004 – Finance Report and Control

Semester 1-2022/2023 BLEMBA67 Hybrid Weekend

Lecturer : Asep Darmansyah

Created By :
PANDIT PURNAJUARA
NIM : 29122187

BLEMBA67 HYBRID WEEKEND

SCHOOL OF BUSINESS AND MANAGEMENT
BANDUNG INSTITUT OF TECHNOLOGY
2022
 Planning, Control and Decision Making

Many companies use budgets for three purposes. First, they use them to plan how
to deploy resources to best serve customers. Second, they use them to establish
challenging goals, or stretch targets, to motivate employees to strive for exceptional
results. Third, they use them to evaluate and reward employees.
Assume that you are a sales manager working with your boss to create a sales
budget for next year. Once the sales budget is established, it will influence how other
departments within the company plan to deploy their resources. For example, the
manufacturing manager will plan to produce enough units to meet budgeted unit sales.
The sales budget will also be instrumental in determining your pay raise, potential for
promotion, and bonus. If actual sales exceed the sales budget, it bodes well for your
career. If actual sales are less than budgeted sales, it will diminish your financial
compensation and potential for promotion.

Required
:
1. Do you think it would be appropriate for your boss to establish the sales budget
without any input from you? Why?

Answer :
No, because as a sales manager I should provide historical data of sales to forecast
next year sales budget.

2. Do you think the company would be comfortable with allowing you to establish
the sales budget without any input from your boss? Why?

Answer :
No, because consider the Boss as a decision and strategic maker and as accountable
person.

For number 3 - 5 using the following table :

Sales Manager Thoughts’s Boss Thoughts’s

Budgeting 3. Maximize Customer
Satisfaction
4. Increase in the
productivity of every
employee and every division
of the company
5. It is expected that there
will be an increase in
performance due to the
bonus given to the employee
from every target sales
3. Most efficient resources
and maximal sales
4. Increased production and
sales as a result of increased
productivity
5. There is an increase in
overhead / indirect costs,
must be balanced with
increased sales.
 Controlling 3. Controlled by using
customer engagement
survey to assess the
efficiency of implementation
4. Controlling and analyze
the productivity of the
employee
5. Controlling each sales
target given as a task to each
employee
3. Using monthly reporting
resources, create threshold
signal to control efficiency
budget
4. Determined KPI (key
performance indicator) for
every employee
5. Apply rewards and
punishments to each given
target

3. Assume the company uses its sales budget for only one purpose—planning to deploy
resources in a manner that best serves customers. What thoughts would influence your
estimate of future sales as well as your boss’s estimate of future sales?
4. Assume the company uses its sales budget for only one purpose—motivating
employees to strive for exceptional results. What thoughts would influence your
estimate of future sales as well as your boss’s estimate of future sales?
5. Assume the company uses its sales budget for only one purpose—to determine your
pay raise, potential for promotion, and bonus. What thoughts would influence your
estimate of future sales as well as your boss’s estimate of future sales?
6. Assume the sales budget is used for all three purposes described in questions 3–5.
Describe any conflicts or complications that might arise when using the sales budget
for these three purposes. Use the following table :

Conflicts or complications
Budgeting There is a conflict due to the split focus in determining budgeting in terms of the
allocation of funds for direct costs in terms of pursuing production and sales to serve
customers, and indirect costs in terms of supporting performance. This cannot be done
massively in all directions for the purpose of determining the budget, because the
number of budgets is also limited. With not optimal budget allocation can result in not
achieving the company's goals in general.

Controlling In terms of control system becomes more complicated if it is done simultaneously as a

goal. This will also result in the emergence of significant costs just for the manufacture
of the controlling system. As well as making a focus for allocating time for
management in terms of more detailed and numerous internal evaluations. Not to
mention that this will cause the need for additional resources because of the divided
focus in terms of controlling.

7. In managerial accounting, companies use controls to reduce the risk that their plans
will not be achieved. Do you agree ? Give an example.
Answer :
Agree. One of the method to achieve long-term company targets is to control risk by
establishing a risk management system. The company must identify each risk in various
aspects, such as operational, production, procurement, financial, etc. In this case, the
company must determine the level of risk that can be tolerated by the company so that it
also does not set targets that cannot be achieved due to too much risk to be borne. The
best strategy is to pursue targets in the long term by gradually managing risks with
realistic targets without endangering the company due to taking high risks.
8. Actually, there are the three pillars of managerial accounting are planning, controlling,
and decision making. Provide an example of how planning, controlling, and decision
making should be done by manager of the company other than accounting
manager.
Answer :
In example, as marketing and sales manager of the company.
A. Planning :
 He has to establish the goals, specify the targets, and budgeting
He must set marketing targets for several types of products by using a period of 1
month to achieve sales or get 50 customers in 1 month per product.
He must determine his marketing strategy, from which costs arise that must be
allocated in the budget in order to achieve his marketing target.
B. Controlling :
Then he must control the implementation regarding the suitability of the
marketing strategy to the type of customer, and the location or marketing channel
for example. In addition, a kind of review from customers is also needed
regarding product and marketing assessments to evaluate the accuracy of
marketing methods.
C. Decision Making :
After being evaluated on a regular basis, as a marketing manager or sales
manager, we must be able to determine policies that have a good impact on the
company, especially in terms of strategic accuracy against costs that have already
been released. If after evaluating the sales and marketing performance is not
optimal according to the target for the costs that have been incurred, then
decisions must be taken by a marketing manager. The solution can be to change
the marketing strategy or reduce costs by saving on costs that do not directly
impact the marketing strategy.

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