ACC Wk 4 - RUNNING HEAD: BUDGET PAPER FOR GUILLERMO...

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RUNNING HEAD: BUDGET PAPER FOR GUILLERMO FURNITURE STORE 1 Budget Paper for Guillermo Furniture Store Team A: Leonard Anthony, Tanya Gordon, Charles Blackstone, and Carol Jackson ACC/561 ACCOUNTING Reza Rafi 28 February, 2011 University of Phoenix
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RUNNING HEAD: BUDGET PAPER FOR GUILLERMO FURNITURE STORE 2 A budget is one of the most important aspects of an organization. It provides the company with a detailed, comprehensive financial overview of the company’s planned operations. It provides opportunities as well as identifies potential problems to help a company exploit these opportunities and/or avoid problems. In this paper we will talk about the risk associated with sales forecasts, give an analysis of ethical considerations concerning the budget, and how the organization’s code of ethics require an ethics analysis for any performance tool. We have also included a revised store’s flex budget by using Excel. Risk associated with sales forecasts Guillermo Furniture Store faces several issues as they prepare their budget in conjunction with forecasting sales for the upcoming year. As with any business, a risk assessment must be conducted in order to develop a realistic budget that is workable. The resources that pose a risk to a company must be evaluated. These risks include, but are not limited to: personnel, manufacturing, technological decisions, and financial evaluation. The store is at risk by keeping too many personnel employed when production is down and inflation increases. Downsizing creates a negative image to both customers and employees. Customers may feel that the business is doing badly, even if it is not. Employees may feel that their jobs are not secure and may seek employment elsewhere. (eHow, 2011). With the change in how furniture is manufactured (or built) to a modification in the present delivery method, Guillermo Furniture Store will have to adapt to the transformation without financially ruining their present status. Every business today is affected by the rapid changes in technology. These changes include the switch from most
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RUNNING HEAD: BUDGET PAPER FOR GUILLERMO FURNITURE STORE 3 tasks being performed today by humans to more automated functions such as robotic manipulations. The risks associated with these new automated functions could devastate a business financially if operations are hampered by a failure in the new system. Additionally, if this was to occur there could be a lack of personnel retained with the
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ACC Wk 4 - RUNNING HEAD: BUDGET PAPER FOR GUILLERMO...

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