You
were recently hired as management director of the new I Can Business
Incorporated (ICBI). You have been asked
to establish policies and systems for the business. The first one you choose to work on is a
financial reporting system.
For this assignment, you must develop a memo that you will
deliver to the board of directors of ICBI.
You will describe what a financial reporting system is and
explain how management of ICBI should use an activity based budget instead of
an operating budget. Be sure to explain
the similarities and the differences of the two. Finally, give examples of budget guidelines
for ICBI.
You must answer the following questions:
Describe the meaning and the components of a financial reporting
system.
Write a description of how management should use an activity based
budget instead of an operating budget.
Explain the similarities and differences of the two budgets.
Give an example of budget guidelines that ICBI should follow in order
to successfully plan.
Identify and describe at least 5 basic budget guidelines.
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