For This Assignment You Will Decide What Type Of Budget To U

For This Assignment You Will Decide What Type Of Budget To Implement

For this assignment, you will decide what type of budget to implement for a start-up company. Write a 3–4 page paper in which you: Summarize the type of manufacturing company you plan to start up and determine how you will design the value chain for your manufacturing company. Describe the type of budget you plan to implement in your company and outline the budgeting review steps necessary to ensure that your company reaches the financial forecast. Select at least four specific benchmarks you will utilize in your company. Explain the benchmarks selected and their benefits to your company. Explain the type of cost system you plan to implement in your company and identify any major challenges in implementing your cost system. Suggest a way to overcome the identified challenges. Integrate at least three quality resources using in-text citations and a reference page in your assignment. Note: Wikipedia, Investopedia, and similar websites do not qualify as quality resources. Use Basic Search: Strayer University Online Library or the iCampus University Library Research. This course requires the use of Strayer Writing Standards.

Paper For Above instruction

Starting a manufacturing company demands meticulous financial planning, especially concerning what type of budget to adopt. In this paper, I will outline the nature of my envisioned manufacturing enterprise, the design of its value chain, the budgeting approach, benchmarks, and cost systems, along with strategies to address potential challenges. The goal is to craft a comprehensive financial framework that ensures sustainability and growth.

Overview of the Manufacturing Company

My startup is envisioned as a small-scale manufacturer specializing in eco-friendly packaging materials. The company's core mission is to produce biodegradable containers suitable for the food industry. The manufacturing process involves sourcing sustainable raw materials, employing efficient production techniques, and distribution to local markets. This focus aligns with global trends toward environmental responsibility and offers promising market opportunities given rising consumer demand for sustainable products. The value chain will encompass raw material procurement, manufacturing, quality assurance, warehousing, and distribution. Designing an efficient value chain involves establishing reliable supplier relationships, optimizing production workflows, and integrating eco-friendly practices to distinguish the brand and enhance customer value.

Budget Type and Review Processes

For this manufacturing start-up, I plan to implement a combination of a zero-based budget and flexible budgeting approaches. Zero-based budgeting requires justifying all expenses from scratch each period, which is suitable during the startup phase to control costs and allocate resources efficiently. As the business stabilizes, I will adopt flexible budgets to adapt to market fluctuations and operational variations promptly. Regular budget reviews, conducted monthly and quarterly, will serve as critical checkpoints, allowing for variance analysis—comparing actual costs and revenues against forecasts. This review will identify deviations early, enabling corrective actions to stay aligned with financial forecasts, reduce waste, and improve financial management effectiveness.

Benchmarks and Their Benefits

Selecting appropriate benchmarks is vital for tracking progress and ensuring strategic alignment. Four benchmarks I plan to utilize include:

• Cost per Unit: Monitoring this allows for evaluating manufacturing efficiency and identifying cost-saving opportunities. Maintaining low-cost units enhances profitability and competitiveness.
• Production Cycle Time: Reducing cycle time boosts productivity and allows quicker response to market demand, ultimately improving market share.
• Customer Satisfaction Scores: Regular assessment reflects product quality and customer service excellence, fostering brand loyalty.
• Return on Investment (ROI): Tracking ROI ensures capital is effectively utilized, and investment decisions contribute to sustainable growth.

These benchmarks offer measurable targets, foster accountability, and guide strategic adjustments to improve overall operational performance.

Cost System Implementation and Challenges

I plan to implement an activity-based costing (ABC) system, which allocates overhead costs to products based on actual activities that consume resources. ABC provides more accurate product cost information, supporting strategic pricing and cost control decisions. However, implementing ABC can be challenging due to its complexity, resource requirements, and the need for detailed data collection. Resistance from employees accustomed to traditional costing methods may also hinder adoption. To overcome these challenges, I will invest in comprehensive training to educate staff about ABC’s benefits, simplify data collection through automation, and ensure management commitment to support the transition. Continuous monitoring and periodic review will facilitate smoother implementation and integration into the organizational culture.

Conclusion

Establishing a robust financial framework is essential for the success of a manufacturing start-up. Using a hybrid budgeting approach, setting strategic benchmarks, and implementing an activity-based costing system tailored to the company’s operations will ensure precise financial management. Addressing implementation challenges proactively, through training and technological support, will foster effective adoption. Overall, these strategies will position the start-up for sustainable growth, operational efficiency, and competitive advantage in the eco-friendly packaging industry.

References

• Drury, C. (2013). Management and cost accounting. Cengage Learning.
• Kaplan, R. S., & Cooper, R. (1998). Cost & effect: Using integrated cost systems to drive profitability and performance. Harvard Business Press.
• Kaplan, R. S., & Norton, D. P. (1996). The Balanced Scorecard: Translating strategy into action. Harvard Business School Press.
• Shim, J. K., & Siegel, J. G. (2012). Financial management for decision makers. Barron's Educational Series.
• Horngren, C. T., Datar, S. M., & Rajan, M. V. (2014). Cost accounting: A managerial emphasis. Pearson.
• Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2018). Managerial accounting. McGraw-Hill Education.
• Jick, T. D., & Peiperl, M. A. (2003). Managing organizational change: A multiple perspectives approach. McGraw-Hill Education.
• Horngren, C. T., Foster, G., & Datar, S. (2000). Cost accounting: A managerial emphasis. Prentice Hall.
• Anthony, R. N., & Govindarajan, V. (2007). Management control systems. McGraw-Hill Education.
• Brigham, E. F., & Ehrhardt, M. C. (2016). Financial management: Theory & practice. Cengage Learning.