G Furniture Store
- Submitted by: Chillewack
- Views: 883
- Category: Other
- Date Submitted: 04/04/2010 10:39 AM
- Pages: 4
- Report this Essay
Running Head: Guillermo Furniture Scenario
Guillermo Furniture Scenario
University of Phoenix
Budgets
[pic] In creating a budget, a company attempts to forecast the future performance accurately as possible. A budget is a quantitative expression of a plan of action and an aid to coordinating and implementing the plan (Horngren, 2008 p. 13).” A budget requires detailed assumptions regarding future costs and returns on investment. Although, historical data can provide insight into future performance, it is by no means a reliable method that should be[pic] expected [pic]to[pic] provide consistent results. Essentially, historical data is a best guess. The level and validity of the assumptions are open to interpretation and assumptions, which are required to create budgets for a company, department, or given project. [pic]The role of the budget[pic] [pic]serves as a tool to evaluate performance, eliminate inefficiencies, and part of the business controls.[pic]
Reviewing Guillermo budget and performance report facts, give insight into business practices and this information can dictate a company’s success or failure. Guillermo under estimates the budget for low end pieces and over estimates the demand for high end furniture. Guillermo can analyze purchase decisions and production habits to better serve customers and the company’s needs and be more responsive to seasonal product demands and services needed to make informed decisions based. The facts presented in budget and performance reports are vital to success “many accounting systems provide performance reports that compare actual results of decisions and activities with previously determined plans. By pinpointing where actual results differ from plans, performance reports can show managers how they are doing and show the managers’ superiors where to take action (Hongren, 2008 p. 6).”
Performance Reports
The most effective way Guillermo can use a performance report to implement a...
Guillermo Furniture Scenario
University of Phoenix
Budgets
[pic] In creating a budget, a company attempts to forecast the future performance accurately as possible. A budget is a quantitative expression of a plan of action and an aid to coordinating and implementing the plan (Horngren, 2008 p. 13).” A budget requires detailed assumptions regarding future costs and returns on investment. Although, historical data can provide insight into future performance, it is by no means a reliable method that should be[pic] expected [pic]to[pic] provide consistent results. Essentially, historical data is a best guess. The level and validity of the assumptions are open to interpretation and assumptions, which are required to create budgets for a company, department, or given project. [pic]The role of the budget[pic] [pic]serves as a tool to evaluate performance, eliminate inefficiencies, and part of the business controls.[pic]
Reviewing Guillermo budget and performance report facts, give insight into business practices and this information can dictate a company’s success or failure. Guillermo under estimates the budget for low end pieces and over estimates the demand for high end furniture. Guillermo can analyze purchase decisions and production habits to better serve customers and the company’s needs and be more responsive to seasonal product demands and services needed to make informed decisions based. The facts presented in budget and performance reports are vital to success “many accounting systems provide performance reports that compare actual results of decisions and activities with previously determined plans. By pinpointing where actual results differ from plans, performance reports can show managers how they are doing and show the managers’ superiors where to take action (Hongren, 2008 p. 6).”
Performance Reports
The most effective way Guillermo can use a performance report to implement a...