Read the scenario below, and address the subsequent requirements. Emma is the plant manager of an electronics...

50.1K

Verified Solution

Question

Accounting

Read the scenario below, and address the subsequentrequirements.
Emma is the plant manager of an electronics company.Plant managers are paid a salary and get an additional bonus equalto 5% of their base salary if their division meets or exceedstarget profits for the year. The bonus is determined after thecompany’s annual financial report has been prepared and issued toshareholders.
Emma’s division uses a process costing system where theestimate of the percentage completion of ending work in processinventories affects the unit costs of finished goods and thereforethe cost of goods sold. (All units completed and transferred out ofthe final processing department were sold.)
Emma just received preliminary profit figures for herdivision which show it is within $200,000 of making the year’starget profits. To earn her bonus, Emma simply needs to convinceJames, her lead production supervisor, to increase the estimate ofthe percentage complete of ending work in process inventory. Jameshas already submitted the percentage completion figures tocorporate headquarters.
In your post, address the following questions:
What are the ethical issues in this process costingenvironment? What are the risks?
Do you think Joe should go along with Emma's request toalter estimates of the percentage completion? Why or whynot?

Answer & Explanation Solved by verified expert

3.9 Ratings (543 Votes)

Ethical issues in this process costing environment The four major factors that can cause ethical problems in the workplace are lack of integrity organizational relationship problems conflicts of interest and misleading advertising They violated each of the four areas that can cause immense ethical problems Businesses affect the environment through the extraction and utilisation ofenvironmental resources and through pollution that is released through these processesBusinesses positive environmental effects can be seen as the reverse they can create environmental resources and reduce pollution There are three major types of environmental costs1 compliance2 preventive 3 green The first step in evaluating expenses is to establish topics for data collection such as cost types process categories environmental management and process stepsRecently organizations of all sizes and complexities have started to examine new ways to evaluate their cost information including See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member