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ACC561 / ACC 561 / Week 1 Individual Assignment: Guillermo Furniture Store Scenario

ACC561 / ACC 561 / Week 1 Individual Assignment: Guillermo Furniture Store Scenario

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Individual Assignment: Guillermo Furniture Store Scenario
 Read the Guillermo Furniture Store Scenario.
 Write a 700-word paper explaining the following:
o How could Guillermo use budgets and performance reports in his decision-making process?
o How might ethics influence his accounting decisions?
o What accounting information is most relevant for Guillermo to consider when making decisions?
 Include citations and references in your paper where appropriate.
 Format your paper according to APA standards.
 Post your assignment as a Microsoft® Word attachment.
5. Respond to the Discussion(s) Questions posted by your instructor
Individual Assignment: Guillermo Furniture Store Scenario
 Read the Guillermo Furniture Store Scenario.
 Write a 700-word paper explaining the following:
o How could Guillermo use budgets and performance reports in his decision-making process?
o How might ethics influence his accounting decisions?
o What accounting information is most relevant for Guillermo to consider when making decisions?
 Include citations and references in your paper where appropriate.
 Format your paper according to APA standards.
 Post your assignment as a Microsoft® Word attachment.
5. Respond to the Discussion(s) Questions posted by your instructor

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1 Running head: GUILLERMO FURNITURE STORE SCENARIO

Guillermo Furniture Store Scenario - Decision-Making YOUR NAME(S) ACC/561 DATE PROFESSOR’S NAME

2 .

3 Guillermo Furniture Store Scenario . since it tells him about the comparative figures that he will need to consider when he uses the any of the three different methods (broker method. before taxes. next whether or not he should join forces with the Norwegian manufacturer.118. Guillermo can use information about production. budgeting the net revenue will tell Guillermo what estimate he should make of the net revenue and net earnings that would result if he changed his sale to include coated furniture. as he makes decisions. These results are later compared with either standard or budgeted measurements. basically. of $46. and finally whether or not to sell coated furniture. which are all based on different assumptions. The most important decision. of $65. This information would help Guillermo to evaluate the potential profitability of this high-end manufacturing option that he is already involved in. and what the profitability of becoming a representative would offer him. current method).041. According to this information. . hi-tech method. If Guillermo changed to the hi-tech method.00. is whether or not to switch to a computer-controlled laser lathe. The third option. would bring in a net income.175. the current method will bring Guillermo a net income. the financial repercussions of the labor hours. At the same time. The information about income is what will be post important to Guillermo. his net before taxes would rise to $213. of becoming a different company's broker. The general purpose of performance reports is to tell someone what the results of their specific activity would be over a given amount of time. and the total overall value of this production and the potential profits that it could bring to his furniture company. To make the decision about the coated furniture.00. before taxes.Decision-Making How could Guillermo use budgets and performance reports in his decision-making process? Guillermo can use reports that refer to his budgets and performance in a number of ways.00.

for Guillermo. production. for the cost of labor. His ethics might also come into place in the broker decision situation. as unethical. either accounting for fees. going after the hi-tech production initiative will require a certain level of staff cuts. How might ethics influence his accounting decisions? There are a number of ways that Guillermo's accounting choices might be influenced by ethics. as Guillermo comes up with the budget for the decision-making process for the hi-tech option. Guillermo will need to make his accounting decisions with a high level of reliability and integrity in every part. . For instance. or to Guillermo himself.4 Part of a balanced decision in this case. he might face different accounting dilemmas. is reflecting on the different investment that each of these options would require him to make initially. his debt-toequity position looks quite poor due to the mortgage note payable. in order to really go after the hi-tech manufacturing initiative option. Guillermo's ethics can easily cloud his decisions in accounting since. Particularly. Guillermo must accurately and honestly report the potential profits that each method might bring him. These cuts might appear to others. because he might feel pressured to go after a company because of some personal interest or connection that he may have. In this case. etc. especially as it pertains to the hi-tech option and his potential investment. for instance. Guillermo will need to honestly report his debt equity position.

before taxes.5 What accounting information is most relevant for Guillermo to consider when making decisions? For Guillermo. It is necessary to remember that. It would make sense for Guillermo to balance the potential before-tax net income from these scenarios with the cost of this additional capitol. the most important accounting information that he could consider is the possible net income. . both are subject to high depreciation charges. that each of these scenarios could bring him and his business. the information about this before-tax net income should be compared to the investment that he will need to make to fulfill any of these potential scenarios. and where this capitol will come from. This means that the extra cost for capitol that might need to be spent to get hi-tech machinery is not necessarily a part of the predicted actual depreciation cost. as far as the scenarios about the broker option and the hi-tech option go. At the same time. Each scenario is subject to an equal level of depreciation. along with how much capitol it will cost him to make the investment.

from University of Phoenix. 2009.). (2009).6 References Horngren. . University of Phoenix (UOP). 2009. (2009). C. New Jersey: Pearson Prentice Hall. Week One supplement: Guillermo Furniture Budget. (2008). Introduction to management accounting (14th ed. Week One supplement: Guillermo Furniture Scenario.T. Retrieved May 10. ACC/561—Accounting Course Web site. University of Phoenix (UOP). Upper Saddle River. Week One. Week One. from University of Phoenix. Retrieved May 10. ACC/561—Accounting Course Web site.

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