Ferguson and Son Manufacturing has numerous problems with their current budget control system. Inefficiencies in their system reduce the effectiveness of the company. First, Tom, the machine shop manager, has an idea of ​​what the accounting report will show in meetings. He doesn't know if the relationship will be good or bad. If Tom has any idea what's going on, he knows how to gauge whether he's on track to meet his budget goals. It doesn't know where the exact inefficiencies are or how to fix them. Tom needs to know exactly what the owner and managers are looking for so he can make the necessary changes. Secondly, the system used is based solely on cost reduction. Emory believed that the company's goal was a quality product, but management's goal appears to be cost reduction. The company owner promoted Tom for the quality of his work as a machinist, meaning that quality was once one of the company's main goals. The owner's son, Robert Ferguson, seems to focus primarily on cutting costs and not on the quality of the work. The current system only rewards cost reduction, which will mean that managers will not focus on the quality of work. Poor work will undoubtedly be detrimental to Ferguson. If Robert focuses only on reducing costs, customer satisfaction will decrease. Employees should not be confused about the company's goals. The third problem concerns the workshop machinery. They lost a day of work due to the failure of the hydraulic machine. Defective machinery can lead to defective products, lost man-hours and lost resources. Defective machinery will lead to increased product costs. Fourth, the current system does not take into account the fact that labor is stopping much of the paper regarding pricing policies, inventory investments, equipment investments, etc. Labor cost can improve Ferguson's ROI with just a few steps. Ferguson needs to make sure they price their services correctly. They need to track production costs, determine the true value of the service, and make sure the work is done efficiently. Through an activity-based costing system, Ferguson will improve ROI and free cash flow. Job costing will offer a protocol for costs and pricing and will make it easier to achieve profits whose numbers will work positively with your ROI. Planned expenses as part of business operations will allow the budget control system to increase the free cash flow in the business. The new budget system for Ferguson will not only increase the company's profitability but also increase efficiency in achieving the company's mission.