ACC 350 Week 8 Discussion

Running Head: Assignment 1: Start-Up Budgeting 1

Assignment 1: Start-Up Budgeting 2

Assignment: Start-Up Budgeting

Denise Bryant

Strayer University

ACC 350: Managerial Accounting

May 29, 2020

Introduction

In the manufacturing company value chain are the activities adopted by the firm for converting the raw materials into final goods. The value chain helps the firms cut and eradicate the non-value activities that increase the business cost. The main objective of the value chain analysis is the effective utilization of the available resources for the successful production of goods and services. It makes the firm competent enough, limits the cost of operation, and ensures the production of the quality products if analyzed successfully (Bustinza, Bigdeli, Baines & Elliot, 2015).

A pharmaceutical company is a company that I would like to start as a manufacturing company because of the increasing demand for pharmaceutical products and technology and the availability of the large market for pharmaceutical products. Before beginning any business, it is essential to understand the market trends because the complete information regarding the market trends helps the new business in competing constructively. The efficient functioning of the pharmaceutical company is highly based on expert researchers and staff. The growing health problems and the advancement in technology have increased the demand for a technological solution. Ritter Pharmaceuticals Inc and XBiotech are the two leading names of the pharmaceutical industry of the United States. Both companies are privately owned companies are dealing with the therapeutic products with the help of the biotechnology. The main concern of my company will be to deal with therapeutic outcomes.

Type of budget

Budgeting is a critical component of every business because it involves all the expenses and the sales that companies will incur in the future. Prior budgeting helps the company in analyzing all the financial matters and to make the business successfully operate in the market. The operational budget is the type of budget that is preferred for this type of business because the operational budget includes all the relevant information on the expected cost and expected revenue that the industry has to bear from day to day operations. The income of the pharmaceutical business depends on the sales of its products, and the components of the cost are quite similar to other types of business, but the adoption of biotechnology will both increase the value as well as enhance the quality of the products.

Although operational budgets are assessed yearly, is the new company, it is necessary to review it after each week or monthly basis to maintain the flow of the business by relating the results and making the required alterations needed for the successful operations of the business.

Budget Review Steps

The main objective of the budget revaluation step taken by the businesses is to support the business's adequate performance. This overall process is known as the strategic planning that keeps the company on track and helps the corporation attain the objectives effectively and efficiently through proper analysis and planning. The budget should be designed or and must follow the vision of the business

After strategic planning attaining the goals of the business effectively is the second important step. The main objective of the new pharmaceutical company is to provide the quality medicines and treatment process to the patients and earn revenue by selling the products and services. The attainment of the financial information through budgeting process is essential because this information will, in the future, help in business expansion and will also assist in daily operations.

Financial experts play a significant role in the success of the business. All the steps discussed above can be attained successfully with the help of the financial experts and analysts in the business. The effectiveness of the financial decisions and the budgeting process can be analyzed through profit margin, which depicts the business's returns and steady position.

Benchmarks

XBiotech is the privately-owned pharmaceutical company that has got expertise in developing the next generation therapeutic antibodies. XBiotech is focusing on producing the high-quality therapeutic products and playing a major role in medicine. It is the most suitable company to benchmark because it is also dealing with the same nature of products and in most effective manner (XBiotech Medtrack Company Profile, 2016).

Ritter Pharmaceuticals Inc is also the pharmaceutical company that has started its operation in 2004 and is dealing with therapeutic products especially the gastrointestinal diseases with the help of the human gut microbiome. This benchmarking of this company will help in the enhancement of the quality of the procedures and the product (Ritter Pharmaceuticals Inc Medtrack Company Profile, 2019).

GlaxoSmithKline (GSK) is the famous Bristish pharmaceutical company that is famous for producing different products useful for therapy. The major success of the company is the introduction of drugs for the therapy of HIV/AIDS (Ellis, 2019).

Amgen is an American based famous pharmaceutical company dealing with the human therapies especially cardiovascular disease, oncology, bone health, neuroscience, nephrology, and inflammation (Ellis, 2019).

Costing System

Cost is basically the association of the resources or the money with the operations of the business that business has to pay to continue the operations. Every industry has different costing system dependent on the nature of the businesses, production process and the type of the output (Pristine, 2017).

The standard costing system will be used for this business by predetermining g the cost of some set standards of the industry. These standards are combinedly set by all the leading brands of the industry that helps the new businesses in prior determination of their cost.

This costing system can be sometimes challenging for the new business because of the high technological integration by the biggest firms that makes some procedures expensive and some cheap. Being a new business, it becomes difficult for the management to maintain the operations at high cost so outsourcing is the most adopted strategy to balance the cost and operations of the business.

Sources

Delta Air Lines. (2019, February 22). Retrieved from https://ir.delta.com/stock-and-financial/sec-filings/default.aspx

Partnerships. (2018, May 04). Retrieved from https://www.irs.gov/businesses/small-businesses-self-employed/partnerships

S Corporations. (n.d.). Retrieved May 04, 2018, from https://www.irs.gov/businesses/small-businesses-self-employed/s-corporations

S CORPORATION ESOP ABUSES. (n.d.). Retrieved from https://www.irs.gov/pub/irs-tege/scorpesop.pdf