Management Accounting Memo Essay

Mr. Blackheath had promoted lee uplifted to vice president of finance. leeward had practically been running the soused for several(prenominal) years during which time gross revenue and profit had been declining. On November 15, 1977, Mr. Blackheath announced that his son. Trafalgar Blackheath, would take over as owner and president on January 1, 1978. Trafalgar was a graduate of an MBA program and for several years had been working for a large consulting firm as a marketing specialist. In their private discussions Mr. Blackheath told his son that the problems in the family firm were marketing rather than financial, so the situation was ready made for Trafalgar. Mr. Blackheath, it seems, had been tout ensemble taken by Lee High. When Trafalgar finally arrived on celestial latitude 1, 1977, and began to read various internal reports he realised Blackheath Manufacturing Co. did not apply a cash budget and there didnt seem to be much in the way of financial planning.Trafalgar aske d Lee High about this. Lees response was that Blackheath Manufacturing Co. ran on the basis of several well-developed decision rules and budgets werent necessary because if the firm ever ran out of funds, Mr. Blackheath hardly deposited 10,000 or 20,000 in the bank. Trafalgars response was swift and take in My father is a millionaire, but I am not Lee indicated he didnt know much about budgeting but he would get an assistant to work up some stuff. Trafalgar unyielding to call his old friend Crofton Brockley. Brockley was in charge of several large budgeting projects for a consulting firm and Trafalgar knew Crofton to be a recognized talented on budgeting for small companies. Fortunately for Trafalgar, Brockley wasnt busy that week and was subject to travel down the next day.