Greece Budget Crisis: International Finance

Greece Budget Crisis
Greece Budget Crisis

Greece Budget Crisis

Order Instructions:

Answer the following questions:

What are the major factors leading to the budget crisis in Greece?

How did the Euro play a role in the budget crisis?

What’s the current status of Greece’s budgets?

Greece Budget Crisis

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Greece Budget Crisis

Factors leading to the budget crisis in Greece

Greece, among other European countries, suffered among the worst debt crises in about a century. While measures are slowly being put in place to reverse the effects of the debt crises, various lessons ought to be learned from the experience. In line with this agenda, the following is a description of some of the major factors that led to the occurrence of the debt crisis in Greece.

A widening budgetary deficit

Towards the close of the 20th century, Greece ranked among the highly developing nations. During this period, the debt levels of the country were fairly constant and manageable. However, at the start of the 21st century, the nation’s debt levels were steadily rising at alarming levels. This led to rising levels of deficit such that the country’s GDP could not cope up. This kept growing, with a reported figure of the debt level comprising 15.4% of the Greece’s domestic product (Kouretas & Vlamis, 2010, p. 394). This continuous increase in the deficit of the country is among the major factors that led to the crisis in Greece.

Absence of consolidated financial and economic reporting

The strengthening of economies and trade relations were the reasons for the formation of the Eurozone and the EU. As such, one would expect a strict level of standards with respect to reporting of economic and financial issues. However, the case on the ground was different, as each country carried on with individual standards. Therefore, when there were rising issues over the economic performance of some member states, there was nobody warranted to control the reporting of the issues nor provide fiscal discipline measures (Manessiotis, 2011, pp. 12 – 14). This led to lack of augmented reports between regimes, as well as the widespread misreporting of figures in Greece to cover up the real situation.

Disagreements among EU countries

During the period when Greece needed help and intervention from other EU member states, there were rampant political differences. The attempts by some nations to raise concern over the deteriorating issue found more criticism as to the legality of bailouts by the European Union (Kouretas & Vlamis, 2010, p. 396). The time taken to solve such disputed was crucial and could have saved the looming crisis. In addition, once the debt and economic crises spread to other nations in the Eurozone and the Balkans, there was more disagreement on which regions to aid first.

Deflation of the worsening situation

As observed, a major factor behind the Greek debt crises was the lack of swift action to mitigate the impending crisis. As an internal measure, Greece decided to deflate the figures in various reports of the situation. As an example, the debt levels had to be revised upwards from estimates of 6.5% and reported figures of 12.7% to 15.4% of the GDP in 2009 (Kouretas & Vlamis, 2010, p. 394). The attempted cover-up of the situation only made matter worse as it did not provide the need to fast-track an attempt at a solution.

The role of the Euro in the budget crisis

In an attempt to bail itself out of an impending crisis, Greece sought to acquire private and public debt to stabilize the economy. The increasing private debt within the Eurozone escalated the issue, with the dismal performance of the Euro owing to the global economic crisis in 2008 (New York Times, 2016)…..

Greece Budget Crisis

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Master Budget and Flexible Budgeting

Master Budget and Flexible Budgeting
Master Budget and Flexible Budgeting

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Master Budget and Flexible Budgeting

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Overview

Compute and prepare a flexible budget, and then write a 1–2-page comparison of a stable inventory policy and a stable production policy.

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

Competency 2: Prepare budgets.

o Apply budgeting process general principles.

o Compute components of flexible budgets.

Master Budget and Flexible Budgeting

Competency 4: Apply cost analysis to assist management decision making.

o Determine factory overhead at varying production levels.

o Analyze the advantages and disadvantages of a stable production policy.

o Analyze the advantages and disadvantages of a stable inventory policy.

Context

For manufacturing companies, labor is a significant cost in the production cycle, from the raw materials stage to shipping of the finished product to the customer. As robotics increasingly replace humans on the assembly line, direct labor costs have become a smaller percentage of total production costs. The transition to robotics has also impacted indirect manufacturing costs, such as depreciation, insurance, and taxes on the robots.

By definition, direct labor is the effort of employees who transform direct materials into a finished product. Meanwhile, indirect labor costs consist of the wages of production employees who do not work directly on the product but are required for the manufacturing facility to operate. These labor costs require the organization to adopt accounting procedures for handling and recording the various payroll costs.

Master Budget and Flexible Budgeting

Questions to Consider

To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community.
• Why is it important to distinguish between variable costs and fixed costs for budgeting purposes?
• Why is it important for organizations’ executive leadership to include front line managers in the budgeting process?

Resources 

The following resources are required to complete the assessment.
The following optional resources are provided to support you in completing the assessment or to provide a helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom.

• Cutler, T. R. (2010). The language of cost. Industrial Engineer, 42(9), 47–50.

• Jagolinzer, P. (2000). Cost accounting: An introduction to cost management systems. Cincinnati, OH: South-Western College Publishing.

• Kren, L. (2014). Tracking value created by efficiency improvements in a traditional overhead cost management system. Engineering Management Journal, 26(1), 3–7.

• Lee, R. T. (2013). Target: Carrying costs. Industrial Engineer, 45(8), 38–42.• Marshall, P. D., & Dombrowski, R. F. (2003, February/March). A small business review of accounting for primary products, byproducts and scrap. National Public Accountant, 10–13.

• Pachura, R. (1998). When is enough, enough?. IIE Solutions, 30(10), 33–35.

• Rao, S. S. (1997). ABCs of cost control. Inc. Tech, 19(9), 79–81.

• Rikhardsson, P. M. (2004). Accounting for the cost of occupational accidents. Corporate Social – Responsibility and Environmental Management, 11(2), 63–70.

• The payroll handover. (1997, August). Management Today, 13.
VanDerbeck, E. J. (2013). Principles of cost accounting (16th ed.). Mason, OH: South-Western Cengage Learning.o Chapter 7.

Master Budget and Flexible Budgeting

Assessment Instructions

For this assessment, complete the following two parts:

Part 1: Use the Assessment 3 Template (linked in the Resources) to compute and prepare a flexible budget for Central Manufacturing Company.

Part 2: Using the information in the template, write a 1–2-page Microsoft Word document in which you include the following:
• Analyze the advantages and disadvantages of a (a) stable production policy and (b) stable inventory policy for a company that has greatly fluctuating sales during the year regarding a master budget and a flexible budget.
• Provide support for your response, and follow APA style for citations and references.
Use 12-point font and double space your paper.
Submit both the completed template and the Word document for this assessment

Master Budget and Flexible Budgeting

Below is a partial answer to the above homework questions by one of our writers. If you are interested in a custom non plagiarized top quality answer, click order now to place your order.

Master Budget and Flexible Budgeting Assessment

Production policies put in place by a manufacturing company is meant for a heavy outcome in return.  Stable production policies formulated by the company help guide the production process. Production policy of the manufacturing company allows it to draw a budget that the company can use to measure its performance. Stable production costs enable the management to group costs incurred in course of production as either fixed or variable.

Flexible Budgeting

The company groups its production costs as either as fixed or as variable costs. Fixed costs are costs that do not change with the change in output; the manufacturing company’s fixed costs projected do not change despite the change in units of production in the flexible budget. Variable costs changes with the change in production output level. Variable costs include; direct material, direct labor, and any other variable overheard that is incurred in the production (Klychova et al., 2014).

Stable production policy gives an organization an opportunity to prepare a flexible budget, carry out planning and performance evaluation and other types of budgeting. Planning and performance policy ensures that budgets are set ahead of the budget period based on the anticipated customers in the surrounding. Performance evaluation tends to compare if the budget is reflected in the actual performances (López & Hiebl, 2014). If the actual result conflicts with the budget, management will review their plans and check on the areas of weakness……

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