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Guillermo Furniture Store Introduction to Management Accounting-ACC/561 April 5, 2009

Guillermo Furniture Store 2 Guillermo Furniture Store Guillermo Navallez makes furniture near his Sonoran home. People recognize Sonora, Mexico as a beautiful vacation spot; is also a large furniture manufacturing location in North America. The area around Sonora has a good supply of timber for the variety of tables and chairs produced by his company. In addition, the labor in the Sonora Mexico is also relatively inexpensive. Guillermo Navallez has priced the handcrafted products at a slight premium for the quality they represented of his company. This paper will discuss how Guillermo Navallez uses his budgets and performance reports in his decision-making process. How ethics might influence his accounting decisions. In addition the paper will discuss what accounting information is most pertaining for Guillermo Navallez to consider when making decisions about his company. Decision-making is not a separate function from management. The fact is decisionmaking is tied together with the other functions, such as Coordinating, Planning, and Controlling. With each of these functions Guillermo Navallez requires that decisions be made. Guillermo Navallez will use his budgets and performance reports. For example, at the outset, Guillermo Navallez must make a critical decision as to which of several strategies would be followed. By examining the budget both past and present budget Guillermo Navallez can make decisions that based on this data, when making decisions about whether Guillermo Furniture will be able to compete with a new competitor that has entered the furniture market and is based overseas. The new competitor uses a hightech approach to build furniture; this new foreign competition can provide furniture at rock-bottom prices and to their customers exact specifications.

Guillermo Furniture Store 3 Another report that Guillermo Navallez could examine to help make a decision could be the performance report because small communities of Sonora has woke up to became one of the largest retailers in the nations headquarters emerged nearby, and its influence had expanded considerably. Sonora has mild weather, beautiful scenery, inexpensive housing, traffic-free roads, and a new international airport. Sonora has had an influx of people and jobs raised the cost of labor substantially. Guillermo watched his employees leave to find better paying jobs, profit margins shrink, as prices fell and costs rose. When Guillermo Navallez discuss the impact that ethics in decision-making, first Guillermo Navallez must determine in what area of his lives he is discussing. The most pressing issue appears to be dignity. Ethics is tightly united with the decision making in business today; integrity, honesty, impartiality, objectivity, and ethical principles for private gain. Morality or Ethics asks questions about how one should act and how they should live. Everything Guillermo Navallez does, or do not do, is a choice that can affect the course of his life and the lives of others like employees. (Acumen 2003) Many ethics rest on universal values that cut across time, religion, politics, culture, and ethnicity. The necessity for a manager or owner to examine constantly the standards that ensure the company is reasonable and well-founded. When one thinks of ethics then they must make an effort to continuous studying our own moral beliefs and their moral conduct, and striving to ensure that they, then adapted them changes which help to shape there lives and live up to the standards that are reasonable and morally sound. Making ethical decisions, many of these decisions managers make require them to consider who this decision may affect in terms of the result as well as the means of the

Guillermo Furniture Store 4 decision. There are different tools for decision making, but several guides to indicate when situations might have an ethical implication. Yet, with this awareness is a major first step before decisions can be made. Then a manager must recognize the moral context of a situation must precede any attempt to resolve it. What accounting information was most relevant for Guillermo Navallez to consider when making decisions about his company is his foreign competition the main point was their production utilized a computer-controlled laser lathe to produce exact cuts in the wood and is highly automated (University of Phoenix, 2009) not very many employees would be needed run this equipment. This would be the most relevant accounting information for Guillermo Navallez because this type of equipment is very expensive he would have to weigh the cost against the benefits.

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Reference Acumen PI Title: The Impact of Ethics on Decision-making., Date:2003-10-09 Hoch, S., J, Kunreuther, H., C, & Gunther, R., E. (2001) Wharton on Making Decisions PA: John Wiley & Sons, Inc. Hoboken, New Jersey Horngren, C. T., Sundem, G. L., Stratton, W. O., Burgstahler, D., & Schatzberg, J. (2009). Introduction to Management Accounting (14th ed.). Upper Saddle River, New Jersey: Pearson-Prentice Hall. Weygandt J. J., Kieso, D.E. & P. D. Kimmel (2005). Financial Accounting, 5th Edition. PA: John Wiley & Sons, Inc. Hoboken, New Jersey University of Phoenix. (2009). The Guillermo Furniture Store. Retrieved April 1, 2009, from University of Phoenix, Week One, ACC561.