Accounting

1. How could Guillermo use budgets and performance reports in his decision make process

In my point of view, Guillermo uses the technique of flexible budget (Horngren et al., 2008, chapter 01, p. 05). This technique helps Guillermo in order to provide different scenarios like changes in unit sales, changes in variable cost (due to the Direct Material, Direct Labor and FOH) (Horngren et al., 2008, chapter 5, p. 7). Moreover, Guillermo also keeps a watchful eye on the macro factors like competitors strategy etc. In the eye light of the competitors reaction Guillermo is able to make appropriate decision. If the Guillermo is willing to take the new robot into its business operation it brings curse for the Guillermo business and also on his family. Moreover, in my point of view Guillermo chooses the option of distribution channel of the Norwegian furniture into North America. It brings greed to the Guillermo business because this strategy not hit the values of its current business. According to all keep things into consideration Guillermo makes the budgets and evaluate variances and take corrective, measures where required in order to runs its business smoothly and efficiently.  

2. How might ethics influence his accounting decisions

Every single businessman wants that its business runs smoothly with out any hindrance in the Guillermos scenario he manipulated his business figures in order to make the business attractive which is unethical (Horngren et al., 2008, chapter 1, p. 09). From the Guillermos accounting decision perspective he manipulated its sales its variable cost per unit, unit sales in order to attract the outside company like makes the figure attractive for the Norwegian company. So it is very important for Guillermo not to take and adopt unethical values in his decision making because it is very good in the long run but disastrous for the company in the long run. Guillermo uses the big bath accounting which is not a good accounting practice and in the future this unethical accounting practice creates a hurdle for Guillermos business.      

3. What accounting information is most relevant for Guillermo to consider when making decisions

The most significant and meaningful accounting information that Guillermo will take into consideration is Earning before taxes. Because if Guillermo chooses the option of controlled lathe then he will certainly made an additional investment which means that lower deprecation is imposed on his investment and in the end he will pay lower tax. This initiative will increase the net profit of the Guillermo store. Moreover, if Guillermo chooses the option of Norways manufacturer then he has to make additional investment which results in the shape of higher depreciation and lower tax rate. As a result, earning before tax is more appropriate for decision making rather than on the basis of net profit. The Guillermo should consider the other accounting information. The information is
Companys current sales figure both in terms of unit and in volume.

If Guillermo chooses the robot option it increases its capital expenditure.

Impact on direct labor and FOH cost in both scenario (Robot or distribution).

Companys current financing position like they are capable to take either more debt or more equity.

Net income or additional income should more than WACC which is important for the companys business and its future prospects.