Rodolfo Furniture Store Budget Analysis

1221 words 5 pages
Rodolfo Furniture Store Budget Analysis
Edric Hernandez-Cruz
Gisela Franqui-Atiles
Valerie Santiago-Rodriguez
Yachira Rodriguez-Cuevas
University of Phoenix PR Campus
ACC / 561PR
Rafael Marrero Diaz
November 9th, 2012

Rodolfo Furniture Store Budget analysis is important for any corporation. From small businesses to large enterprises; all organizations evaluate the numbers in order to get a picture of where the company stands economically. This will serve as a basis in order to make decisions as to the direction the entity would like to go. Erroneous decisions can lead to bad decisions that may end up in losses for the company. Rodolfo Furniture is on the verge of making a shift from a furniture maker to distributer. Yet
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Ethical considerations in the preparation of budget
Before the development of a budget it is wise to consider the ethical involvements that can be present during it process. Incentives to lie and cheat are Rodolfo tempting actions for managers. Horngren (2008) stated, “It is common for managers of larger units with more resources to have higher pay, higher status, and greater prospects for promotion” (p.301). This is common ethical flaw from the workers. The organizations have to prepare ways to identify, minimize and discourage this kind of behaviors.
Subsequent use of the budget
After completing the budget process, the information populated contains useful components that benefit the manager’s strategies behavior. According to Horngren (2008) there are four major benefits of effective budgeting. The mention benefits are: evaluation of activities, formalization of planning, performance evaluation, communication and coordination. By following the Rodolfo Furniture Scenario the four major benefits helps the mention company presented at the outgoing sentences. For the first benefit the main idea is the reevaluation of the actual activities and the evaluation of the opportunities to embrace new ones. The scenario display at the week 2 assignment, the foreign competitors surpass the actual company production because of the high-tech solutions use by them. The first benefits assist with the decision of changes in this