Guillermo Furniture Store Scenario

Accounting-MMB/1009 |

Guillermo Furniture Store Scenario |

University of Phoenix |

|

Malaika C. Williams |

8/18/2010 |

|

Abstract

This document reviews the Guillermo Furniture Store Scenario where the author discusses how Guillermo use budges and performance reports in his decision making process, how ethics might influence his accounting decisions, and what accounting information is most relevant for Guillermo to consider when making decisions. In this scenario Guillermo is faced with having to make several decisions, which financial principals and concepts have to be applied during his decision making process. In this document the writer will examine how the financial concepts explored in the course relates to Guillermo’s situation.

Sonora Mexico is reputed as a beautiful vacation location, however very few people are aware that Sonora’s economy is largely supported by the furniture manufacturing industry; an industry who primarily supplies their product to North America. Sonora is an area that has a vast supply of timber used in a variety of ways such as the construction of chairs and tables, in addition it its relatively inexpensive labor force.

Guillermo Navallez is a small business owner who owns Guillermo Furniture Store in which he produces his products from his home. For many years Guillermo enojoied the luzury of having little to no competition in relation to doing business. He operated a solid business whereas he has secured his networks and has secured a good life for himself through pricing his handcrafted products at a small premium in comparison to the level of its quality and value. Essentially he was not required nor complelled to make serious financial decisions, the marketplace in which he operated was very conducive to a very conservative approach to conducting business. Currently Gulliermo’s business is experiencing a variety of issues. The business landscape has changed, competitors are becoming more...