Guillermo Furniture Scenario
Amber L. Washington
Accounting 561
Univertity of Phoenix
Guillermo, a furniture maker has constructed one of a kind furniture designs for a number of years close to his Sonora, Mexico residence. This area also had a significant quantity of lumber for the variety of chairs and tables created by his business and in addition labor was inexpensive, and he priced his handcrafted goods at first-rate for the eminence they represented. In general, existence was great for Guillermo until the 1990s when new competitors entered the market pushing Guillermo to make some important decisions for the survival of his company. (University of Phoenix Guillermo Furniture Scenario). This document will identify how Guillermo can use budgets, performance reports, and how ethics can assist and influence him in his decision-making.
Guillermo could use budgets and performance reports in his decision-making process by understanding what the actual cost and difference between the plan. Budget is planning and control tools for management and, in addition, helping to make proactive decisions about a business. Budget includes all revenues and expenditures and provides assistance with determination the spending guidelines for the manager as well as sets performance expectations. Guillermo can use budgets to compare his alternatives and carefully examine all avoidable and unavoidable costs. By pinpointing where actual results differ from plans, performance reports can show managers how they are doing and show the managers’ superiors where to take action (Horngren, Sundem, Stratton, Burgstahler, & Schatzberg, 2008). Guillermo can use the performance report to understand what improvements need to be made in order to stay relevant in the business. The performance reports have to be fair and prepared properly to ensure that the system is working effectively.
Ethics influence Guillermo accounting decisions by maintaining a proper code within the company....