Refer to Amazon.com’s annual report to answer the following questions about its budgeting process and its responsibility centers.
Required:
1. Review the description of business in Item 1, the risk factors in 1A, and the MD&A. Does Amazon.com face more or less than the typical level of uncertainty in forecasting future operations? Why? List and briefly explain five of the most important uncertainties Amazon.com faces in preparing its budgets.
2. One of the risk factors discussed relates to integration of acquisitions. Did Amazon acquire any businesses in 2015 (provide a list and description of each acquisition). How will these affect the budgeting process?
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Budgeting and Responsibility Accounting
Question 1
Amazon faces more than the typical level of uncertainty in forecasting future operations. This is primarily due to the nature of the company’s business. Amazon exclusively sells its products and services online and as such the company works with hundreds of thousands of vendors. This exposes it to uncertainty with regard to fulfillment....
Question 1
Amazon faces more than the typical level of uncertainty in forecasting future operations. This is primarily due to the nature of the company’s business. Amazon exclusively sells its products and services online and as such the company works with hundreds of thousands of vendors. This exposes it to uncertainty with regard to fulfillment....
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