Cameron Bly is a sales manager for an automobile dealership. He earns a bonus each year...

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Accounting

Cameron Bly is a sales manager for an automobile dealership. Heearns a bonus each year based on revenue from the number of autossold in the year less related warranty expenses. Actual warrantyexpenses have varied over the prior 10 years form a low of 3% to ahigh of 10%. In the past, Bly has tended to estimate warrantyexpenses on the high end to be conservative. He must work with thedealership's accountant at year-end to arrive at the warrantyexpense accrual for cars sold each year.
1. Does the warranty accrual decision create any ethical dilemmafor Bly?
2. Because warranty expenses vary, what percent do you think Blyshould choose for the current year? Justify your answer.

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1 Does the warranty accrual decision create any ethical dilemma for Bly Answer Since hes only human the warranty accrual decision may probably create ethical dilemma for Billy If he followed past practice and See Answer

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