The operating budget indicates that the revenues received by Target Corporation would exceed the expenses incurred over the year. These projections would be vital, as they will assist managers and the accounting and administration department to plan effectively and ensure that the company is on the correct path of prosperity. Hansen & Mowen (2006) reirate that an operating budget is a vital forecasting tool that helps to eliminate any form of management shocks in terms of planning. It is worth noting that managers at the accounting and administration department at Target Corporation would be prepared for any form of uncertainties as they utilize the budget for making significant decisions that would ensure successful operations of the company.
The budget would also help the accounting and administration department to control expenses in order to ensure that they are incurred with a high sense of calculation. Kinney & Raiborn (2012) affirm that with the budget, this department would try to avoid a situation where the overall expenses would exceed the revenues realized from operations. Therefore, the management would put in place strategic measures that would ensure that revenues remain ahead of the expenses of the company. This would be vital in ensuring that the profits of the company remain constant, hence keeping the company in business as it competes with other significant retailers such as Walmart Incorporation.
It is worth noting that better decisions relating to the pricing of products at the company would be made in line with the revenues that are anticipated by the company. The accounting and administration department at Target Corporation would understand effective pricing standards to avert a situation where products are underpriced, making it difficult to realize the required amounts. Significant pricing that would be able to retain customers would be adopted, hence ensuring that the company remains on the competition path with its cash-operating budget.
Notably, the adoption of the operating budget would help in the predetermination ofoverall amounts that would be incurred on the salaries of employee and those at the executive level. Stickney, Weil, Schipper, & Francis (2009) agree that it is always vital for a company to understand the amounts that would be used as revenues as this would facilitate significant operations and also help guiding the process of recruitment of new employees. An understanding of the amounts of salaries and wages would open up the company and ensure that it caters for the welfare of its employees appropriately in line with the stated operating budget. Therefore, the operating budget at the accounting and administration department at Target Corporation would ensure that the welfare and salaries for all employees are taken into consideration, and this will help in the aversion of any unplanned recruitments and hiring of additional staff.
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