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Case Study In the case study provided, Westport Electric Company seems to be having serious budgetary problems. The selection, planning and implementation of various projects seem to be faulty. In this particular case, King who is the supervisor of the administrative staff budget staff section has raised a red alarm with regard to two recent budget approvals (Kieso 161).
Background Information: Origin and Magnitude of the Problem The operating activities of Westport Electric Company are categorized in four main groups: “the electrical and transmission group, the Military and Space group, the Home Appliances group, and the Electronics group” (Kieso 161). These groups have various operational divisions. These administrative offices vary in nature and categories. The administrative offices offer top management advice in area of specialty. The vice presidents of these departments constitute the policy committee which takes part in the decision-making. These administrative offices “offer advice to operating divisions and other staff offices and coordinating among divisions” (Kieso 161). Generally, before a project is approved it undergoes a series of checkpoints. “At the beginning of the year, the budgeting department provides timetables and instructions required for the preparation, submission and approval of budgets for the forthcoming year” (Kieso 162). During budget preparation, a number of elements are considered. They include the proposed budget, the previous budget, and the expected costs. The function of the budgeting department prescribes and analyzes the schedules submitted. During the analysis of the proposed budget for the construction of two administrative offices, the budgeting department analyzed all the presented facts and it was satisfied with them. Some of the facts checked include the