Guillermo Furniture Store Needs to Research Paper

Open, View, and/or
Download this Document

Total Length: 758 words ( 3 double-spaced pages)

Total Sources: 2

Page 1 of 3

These controls can include having a standardized procedure for the preparation of the forecast budget or through the application of budgetary slack. The lower the slack management allows in the forecast budget, the greater the lower the variance that can be expected, in particular when the manager making the forecast has reputation at stake on the variance (Ibid). Reputation is an external driver, while ethics are an internal driver (Ibid). Therefore, a code of ethics should be implemented as a control to help define the ethical expectations that the company has for its financial managers.

In the Guillermo Furniture Store situation, the variance from the budget forecast last year left the company with losses instead of profits. Consumers purchased more of the mid-grade product and less of the high-grade product than anticipated; the latter having much higher margins than the former. For the next year's budget, Guillermo senior management should approach the budget hoping to reduce the variance between forecast and actual results.

Stuck Writing Your "Guillermo Furniture Store Needs To" Research Paper?

View All Our Example Guillermo Furniture Store Needs to Research Paper

Have A Custom Example Essay Written

For the next year, the budget should incorporate controls that force it to have a starting point of declining sales in the high-end product, as that has been the trend over the past year. Increasing sales of the mid-end product should also be included. Management can be allowed some budgetary slack, however, if the company wishes to set a goal of stemming the sales losses in the high-end product. Doing this will increase the risk of variance, but this risk is known ahead of time and is understandable given the strategic objectives -- to some degree the forecast budget is based on strategic objectives as much as anything else. The slack points should be carefully defined, however, and the method of budgeting should remain consistent year-over-year so that the data can be gathered to improve the budgeting process in future years.

Works.....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Guillermo Furniture Store Needs To" (2010, June 28) Retrieved June 5, 2026, from
https://www.aceyourpaper.com/essays/guillermo-furniture-store-needs-10025

Latest MLA Format (8th edition)

Copy Reference
"Guillermo Furniture Store Needs To" 28 June 2010. Web.5 June. 2026. <
https://www.aceyourpaper.com/essays/guillermo-furniture-store-needs-10025>

Latest Chicago Format (16th edition)

Copy Reference
"Guillermo Furniture Store Needs To", 28 June 2010, Accessed.5 June. 2026,
https://www.aceyourpaper.com/essays/guillermo-furniture-store-needs-10025
   

Open, View, and/or
Download this Document
order custom essay example