70.2K

Verified Solution

Link Copied!

"How to Set Up a Budgeting and Planning System" by Robert N. West and Amy M. Snyder, Management accounting.

This article demonstrates the setting up of a budgeting and planning system for Penn Fuel Gas Inc., a public utility holding company that provides natural gas storage and transportation services. It stresses the need to review the chart of accounts, account classification and the reporting system of the firm. The discussion includes factors to be considered in the budgeting process and moves to update its current accounting information system.

Discussion Questions 1. What motivates PFG to install a budgeting and planning system? 2. Why is flexibility very important for PFG's budgeting system to be effective? 3. What problems that the budget manager at PFG had to resolve before setting up a budgeting system? Do you find these problems unique to PFG? 4. Why do the authors suggest that a thorough review of the firm's chart of accounts, account classifications, and reporting systems are a must before initiating a budgeting and planning system? 5. Describe budgetary games that people play. What are the reasons for PFG to experience minimal budgetary gamesmanship?

Read 10-1: "How to Set Up a Budgeting and Planning System" by Robert N. West and Amy M. Snyder, Management Accounting (January 1997), pp. 18-20, 22, 24. beginning on Page 38 of readings, NOT cases! Cases and Readings Ch10 8e.pdf This article demonstrates the setting up of a budgeting and planning system for Penn Fuel Gas Inc., a public utility holding company that provides natural gas storage and transportation services. It stresses the need to review the chart of accounts, account classification and the reporting system of the firm. The discussion includes factors to be considered in the budgeting process and moves to update its current accounting information system. Discussion Questions 1. What motivates PFG to install a budgeting and planning system? 2. Why is flexibility very important for PFG's budgeting system to be effective? 3. What problems that the budget manager at PFG had to resolve before setting up a budgeting system? Do you find these problems unique to PFG? 4. Why do the authors suggest that a thorough review of the firm's chart of accounts, account classifications, and reporting systems are a must before initiating a budgeting and planning system? 5. Describe budgetary games that people play. What are the reasons for PFG to experience minimal budzetary gamesmanship

Answer & Explanation Solved by verified expert

See Answer