Guillermo Store Scenario 1

Guillermo Store Scenario
Hector Sierra
University of Phoenix
Guillermo's Furniture Store Scenario
Guillermo's Furniture store is currently facing an unexpected increase in foreign competition which has put Guillermo in a tough position, forcing him to consider different alternatives for his business to survive. Guillermo has conducted research on his competitors’ strategies to stay competitive in the market. This synopsis will help identify three key factors which will help Guillermo implement the necessary changes to his business in order to stay competitive. The four key factors that Guillermo has to consider are budgets and performance reports, ethics in accounting decisions and relevant accounting information.
The two basic types of decisions are planning and control. Horngren, et al., (2008) states that, “The management process is a series of activities in a cycle of planning and control.” Decision making is the purposeful choice of achieving an objective, and Guillermo Furniture will have to consider a few variables in order to achieve an objective. Variables such as budgets, performance reports, and ethics in accounting and relevant accounting information are all equally important in achieving an objective, which in this case would be to stay competitive without risking a large investment in unnecessary equipment or mergers and acquisitions.
Factors in Decision Making
Guillermo has to develop a new budget in order to figure out a feasible business decision. Budget and performance reports can be used by Guillermo Furniture in several effective ways. Guillermo can utilize labor hours and production values to assess expected profits if the company chooses to sell flame retardant stain or alternative coatings. Budgeting will also help Guillermo plan for product growth and improved marketing through revenue and advertising budgets. Budgets also help to coordinate and implement plans. Guillermo’s Budget information can also be used...