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Running head: GUILLERMO FURNITURE STORE ANALYSIS Guillermo Furniture retentiveness Analysis Big and small companies turn out obligations to shareholders to implement processes that promote well-informed growth. A master figure is a tool employ by many managers to facilitate planning and coordination. As give tongue to by Horngren, Sundem, Stratton, Burgstahler, Schatzberg (2008), Managers use work outs as a benchmarkâ€"a measure of expected or desired performance (p. 296). Bud imbibes should have allowances for unpredictable behavior in the industry and the business, such as decreased gross r take downue activity or increased be. wariness must be aware and address challenges associated with completing a master budget such as, difficulties involved with obtaining accurate changes forecasts, employee biases, incentives to lie and cheat and incorporation of ethical standards. Choosing the right budget for the organization and committing to keep it accurate and attainable are keys to success. Risks associated with sales forecasts pull up stakes play a major role in Guillermos budget, if management uses sales-activity levels as the sole cost device driver to measure how effective managers have been in meeting sale objectives.

For example, if Guillermos sales-activity fell short-circuit 100 high-grade units and short 200 mid-grade units, this would result in a loss of $182,655 compared to a $48,300 budgeted loss. The sales activity variance is not affected by price or variable cost changes, because the same budget unit price, unit variable costs, and total fixed costs are used in the flexible and static budgeting process. Horngren et al. (2008), beak that an unforeseen decline in furniture sales will cause actual sales to fall short of predicted sales, even if operations are efficient. Large unfavorable sales-activity variances cause operating(a) income to fall short of predicted static budgeted operating income. Guillermo has chosen to revisal the stores flex budget by development an excel spreadsheet and should therefore include analysis of... If you want to get a full essay, order it on our website: Orderessay

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