Guillermo Furniture Store Scenario

Guillermo Furniture Store Scenario

Lachundra Ingram

ACC 561

June 16, 2010

Uzell Freeman

Guillermo Furniture Store Scenario

Guillermo Navallez, owner of Guillermo Furniture Store, needs to decide the best route to take his business. In the late 1990s, Guillermo experienced a major blow to financial income and quantity demand for his custom furniture when two forces merged in the market. A foreign competitor entered the market offering low prices with clear-cut specifications on furniture products. In addition, to the new issue the town of Sonora, Mexico his home became conglomerates to the largest retailers in the nation. The change caused an influx of people and jobs increasing the cost of labor. For Guillermo business costs climbed substantially and profits decreased. He must strategize various ways to remain afloat the market.

Budgets and Performance Reports

Before Guillermo can begin making decisions for his company, he must implement the users of accounting information. Managers access the information for day-to-day decisions operating and long-run strategic decisions. Budget and performance reports are phenomenal tools accessed by several business operations to control and plan financial decision-making. Budgets represent a quantitative expression of a plan of action (Charles T. Horngren, 2008).

The use of the budget plan will assist Guillermo with coordinating and strategizing plans to build and expand in the furniture market. He should decide what accounting information is necessary for the business. Determine if the company performance is soaring or slumping by scorekeeping. Scorekeeping is the development of accumulation and classification of data. The following data include income statements, balance sheets, and cash flow statements. The statements will determine the growth performance of his company.

Performance reports as a control mechanism for planning vital decision-making to obtain the best solutions...