Control_Chip,_Rolling_Transmitter,_Plastic_Housing_and_Key_Ring.

Rodolfo deberia tomar en consideracion los reportes de desempeno y presupuestos ya que estos brindan informacion responsable de las eventualidades positivas y negativas en la empresa, desde inventarios hasta logros obtenidos en la produccion. Los reportes deben de estudiarse antes de tomar decisiones, y estos te brindaran el comportamiento de los clientes a traves de periodos determinados. De esta manera la empresa puede ser mas precisa en referencia a la demanda de sus productos y servicios. El presupuesto demuestra los recursos de la compania y donde estos deben ser invertidos para cumplir con la demanda. Si la demanda es cubierta satisfactoriamente, y sobra parte de el presupuesto asignado, este debe ser considerado para potenciales inversions. Guillermo Furniture Store Scenario Angela Lilly University of Phoenix Guillermo Furniture Store Scenario Guillermo Navallez is the owner and proprietor of Guillermo Furniture Store in Sonora, Mexico. This company specializes in high end handmade furniture. Recent developments have affected his business negatively. An overseas competitor offering cheaper tech factory produced furniture has seriously eroded his share of the market, and the cost of labor has increased significantly due to the industrialization and development of Sonora (UOP, 2010). If Guillermo wants to remain in business and achieve his former profitability he will have to make drastic changes in the way he now operates. Budgets and performance reports are used mostly by managers to assist in achieving goal and objectives by facilitating three main functions such as scorekeeping, attention directing and problem solving. Scorekeeping is “the accumulation and classification of data” (Horngren, et al, 2008) to determine whether a company is doing well or poorly. Balance sheets, cash flow, annual income statements, and income tax filings are part of the scorekeeping function done by the company’s accountant. This function would allow Guillermo to see how badly the company is doing and what needs to be addressed to retain profitability. The attention directing function addresses which problem needs to be examined. This function involves reporting and interpreting information that facilitates managers focusing on imperfections, inefficiencies, operating problems and opportunities according to Horngren, et al (2008). This function usually involves reports that compare actual results to projected results, to ascertain why the projected results were not achieved. Guillermo would be able to determine if his labor costs were crippling the business or whether he could lower prices to increase sales, and still maintain profitability. “The problem solving function of accounting often involves a special study to assess the possible sources of action and recommend the best course to follow” (Horngren, et al, 2008). Usually by analyzing revenues and costs, management is able to decide which course of action to take. The information or reports used for scorekeeping can also be used for attention directing as after examining the results the information then directs them to where attention should be directed. Guillermo could use the factory’s reports to facilitate a more accurate decision and his cost-benefit analysis. He can analyze his cost which includes labor to decide if by reducing labor costs and producing high tech furniture his business would be more profitable. He would also be able to weigh the cost of investing in new equipment, and determine how quickly he would recoup his investment. This would be the problem solving aspect of accounting, which can also be used to evaluate the possible returns of becoming a distributor, patenting his special coating formula. “The Institute of Management Accountants states that ethics deals with human conduct in relation to what is morally good and bad, right and wrong. It is the application of values to decision making. These values include honesty, fairness, responsibility, respect and compassion.” (Horngren, et al 2008) Guillermo’s ethics will affect his decision as he is concerned that his workers will be displaced if he goes high tech with his production. The technology will cost less and generate more profits but his employees and their families will be affected by the layoffs. Also if he does less manufacturing and more distribution he would also need to reduce his work force so both scenarios would involve staff reductions. “The ability to separate irrelevant information is often the difference between success and failure in modern business” (Horngren, et al 2008) Relevant information will be information which will be a projection of outcome it should not be a summary of the past. According to Horngren, et al (2008) “any data that will differ from alternative to alternative is relevant, any item that will remain the same is irrelevant.” Guillermo will need to analyze the options and their projected outcome, he will need to look at each option individually analyzing the costs which would be variable and determining which would be more profitable for his business. His fixed costs like overheads and administrative costs would be irrelevant as the options would not affect these costs. Guillermo needs to turn his business around by making changes in production and the type of furniture being offered for sale. He must examine his financial statements and accounting information to determine which option will be the most beneficial. In doing so his actions needs to be ethical and he has to consider all parties who will be affected by his decision, and select the best option. Using his budgets and financial reports Guillermo will be able to evaluate each option ethically and professionally. References Horngren, C.T., Sundem, G.L., & Stratton, W.O., Burgstahler, D., & Schatzberg, J., (2008). Introduction to Management Accounting (14th ed.). Upper Saddle River, New Jersey: Pearson-Prentice Hall. Virtual Organization Portal: Scenario: Guillermo Furniture Store, Retrieved on June 27, 2010 from University of Phoenix Website