Discuss how the budgeting process employed by Palmer Corporation contributes to the failure to achieve the president’sales and profit targets.

With the class divided into groups, answer the following.

(a)

Discuss how the budgeting process employed by Palmer Corporation contributes to the failure to achieve the president’s sales and profit targets.

(b)

Suggest how Palmer Corporation’s budgeting process could be revised to correct the problems.

(c)

Should the functional areas be expected to cut their costs when sales volume falls below budget? Explain your answer.

(CMA adapted)

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