#43. after winning $280,000 in the lottery, maurika deided to place the money in three different investments : a certificate of deposit paying 4% , a money market certificate paying 5% , and some Aa bonds paying 7%. After 1 year she earned $15,400 in interest. find how much was invested at each rate if $20,000 more was invested at 7% than at 5% Solution Let c be the investment in certificate deposits, m be the investment in money market deposits and b be the investment in Aa bonds. Investment on Aa bonds is 20000 is more than on money market b=m+20000 Total amount invested 280000 c+m+m+20000=280000 c+2m=260000 (1) After 1 year she earned 15400. 0.04c+0.05m+0.07(m+20000)=15400 0.04c+0.12m=14000 (2) Solving 1 and 2, we get m=90000, c=80000, b=110000.

1. #44
REQUIRED
A. explain the operational and behavioral benefits that generally attributed to a participative
budgeting
b. identify deficiencies in Wagner's participative budgetary policy for planning and performance
evaluation purpose. for each deficiendcy identified, recommended how the deficiencey can be
corrected. lilipiuyees respond more favorably when they participate in the dsetary process. Kevin
Dobbs, treasurer of Systematic Designs, agrees that budgeting is essen- budgetary for overall
organization success, but he argues that human resources are too valuable to spend much time
planning and preparing the budgetary process. He thinks that the roles people play in budgetary
Required Contrast the participative versus imposed budgeting concepts and indicate how the
ideas of Jones and Dobbs fit the two categories getary preparation are not important in the final
analysis of a budget's effectiveness. Behavioral Considerations and Budgeting thony Wagner,
the controller in the Division of Transportation for the state, recognizes the im ance of the
budgetary process for planning, control, and motivation purposes. He believes that roperly
implemented participative budgeting process for planning purposes and a management 05
reporting procedure based on that budget will motivate his subordinates to i by exception
productivity within their particular departments. Based on this philosophy, Wagner has impl
mented the following budget procedures mprove An appropriation target figure is given to each
department manager. This amount is the maximum funding that each department can expect to
receive in the next fiscal year Department managers develop their individual budgets within the
following spending constraint as directed by the controller's staff . Expenditure requests cannot
exceed the appropriation target 2. All fixed expenditures should be included in the budget: these
should include items such . . as contracts and salaries at current levels 3. All government projects
directed by higher authority should be included in the budget in their entiret The controller
consolidates the departmental budget requests from the various departments into one budget that
is to be submitted for the entire division · . Upon final budget approval by the legislature, the
controller's staf allocates the appropriation to the various departments on instructions from the
division manager. However, a specified percentage of each department's appropriation is held
back in anticipation of potential budget cuts and special funding needs. The amount and use of
this contingency fund are left to the discretion of the division manager Each department is
allowed to adjust its budget when necessary to appropriation level. However, as stated in the
original directive, specific projects authorized b higher authority must remain intact. The final
budget is used as the basis of control for a management by exception form of reporting.
Excessive expenditures by account for each department are highlighted on a monthly basis.

2. Department managers are expected to account for all expenditures over budget. Fiscal
responsibility is an important factor in the overall performance evaluation of department
managers .Each department is allowed to adjust its budget when necessary to operate within the
reduced · Wagner believes that his policy of allowing the department managers to participate in
the budget process and then holding them accountable for their performance is essential, e these
times of limited resources. He also believes that department mana tivated to increase the
efficiency and effectiveness of their departments because they have provided nput into the initial
budgetary process and are required to justify any unfavorable performances specially during gers
will be positively mo- t
Solution
Answer to Q. No. A
Operational Benefits:
Behavorial Benefits
Answer to Q. No. B
Looking into the paragraph it seems one major deficiency which is listed below:-
DeficiencyRecommendationGovernment Project directed by higher authority included in their
budgetIdeally it should not be included in their budget and they should be responsible for their
piece which will give them better flexibility in managing their budget. Government budget
should be assigned centrally rather then giving it to individual department manager