acc_561_week_1__dq_2.doc

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acc_561_week_1__dq_2.doc

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Running head: GUILLERMO FURNITURE STORE ANALYSISGuillermo Furniture Store AnalysisYOUR NAME(S)ACC/561DATEPROFESSOR'S NAME Guillermo Furniture Store AnalysisIn the competitive furniture manufacturing industry, Guillermo Furniture must develop a flex budget to ensure profitability is maintained as sales and production levels vary. When preparing and using the flex budget, the company should be aware of the risks and ethical considerations associated with the budget. These risks include inaccurate or uneven reporting, which render the budget ineffective. Any budget that comes to pass will be held up against the company's code of ethics to reduce the chances of conflicting goals.Sales forecasting can be useful if done efficiently; however, there are numerous risks, mostly connected to unethical decision-making. A variety of justifications can direct managers to make unethical decisions regarding sales forecasts. Managers might desire to increase the organization's resources or augment salaries to become more dynamic. Managers may overstate or understate figures to reach profit targets (Harvard Business School, 2005). Such managerial decisions may cause inconsistencies between upper and lower management as the revenues may be unevenly reported, causing upper management to compensate for it, which can, in turn, throw a budget way off. Another risk factor associated with sales forecasts is managerial bonuses, which foster enthusiasm and increased quality, but can

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