Guillermo Furniture Store Scenario - Budget and Performance Reports

Guillermo Furniture Store Scenario

This paper will explain the budgets and performance reports for Guillermo Furniture Store decision making process. It will also give some concepts of ethics which will influence the accounting decisions for Guillermo. In addition, this paper will provide the most relevant accounting information for Guillermo to consider when making decisions.

Budget and Performance Reports

"Management accounting is an essential tool that enhances a manager's ability to make effective economic decisions" (Horngren, Sundem, Stratton, Burgstahler, & Schwartzberg 2011p. xvii). In accordance with the ability for managers to utilize budgets and performance reports for their company is beneficial in a variety of ways. "A budget is a quantitative expression of a plan of action" (Horngren, Sundem, Stratton, Burgstahler, & Schwartzberg 2011 p.13). The usage for budgets and performance reports are having the knowledge of figures are from past and present revenue and losses, budget verses actual performance, product awareness, audits, cost-benefit balances, and budgets implements plans. Without a budge, Guillermo will not be able to carry out plans of the company, and the company will lose its focus, that the company has worked hard to have.

"Performance reports provide feedback by comparing results with plans and by highlighting variances, which are deviations from plans" (Horngren, Sundem, Stratton, Burgstahler, & Schwartzberg 2011 p.13). Performance reports gives mangers evaluations on advertisements, how to measure revenue, also to enhance the advertisements that many companies depend on to gain consumers, and profit. Moreover, performance reports can also receive budget reports, actual reports, competitor's analysis, all cost of the company, and the variance reports, which will tell managers the facts of how the company is doing financially. Guillermo will be able to see the actual breakdown of the budget, the actual, and the variance reports of the company as a whole, if he applies these tools, with his furniture company. These are vital implements that will make his managerial responsibilities

Ethics

The importance of ethics as a manager, and a company results in having integrity, reliability, confidence, and great deal of responsibility. Having ethics is a very valuable tool because it will determine how successful a business and its employees can be, to the name and the brand, as well as the proving high regards to the consumers. The consumers are the individuals that will increase revenue, and the reputation, which are facts that are vital. Guillermo will benefit in profit, gaining new consumers, returning consumers, and long Gevity if he keeps positive ethics and enforce them in his company. Ethics will influence his accounting decisions by keeping