Q 32. C10-78 Ethical dilemmas relating to standards (Learning Objective 3) : PAGE-613
Austin Landers is the accountant for Sun Coast, a manufacturer of outdoor furniture that is sold through specialty stores and internet companies. Annually, Landers is responsible for reviewing the standard costs for the following year. While reviewing the standard costs for the coming year, two ethical issues arise.
Use the IMA’s Statement of Ethical Professional Practice (in Chapter 1) to identify the ethical dilemma in each situation. Identify the relevant factors in each situation and suggest what Landers should recommend to the controller. (250 words)
Issue 1 : Landers has been approached by Kara Willis, a former colleague who worked with Landers when they were both employed by a public accounting firm. Willis recently started her own firm, Willis Benchmarking Associates, which collects and sells data on industry benchmarks. She offers to provide Landers with benchmarks for the outdoor furniture industry free of charge if he will provide her with the last three years of Sun Coast’s standard and actual costs. Willis he will provide her with the last three years of Sun Coast’s standard and actual costs. Willis explains that this is how she obtains most of her firm’s benchmarking data would be very useful.
Issue 2 : Sun Coast’s management is starting a continuous improvement policy that requires a 10% reduction in standard costs each years. Dan Jones, manufacturing supervisor of the Teak furniture line, asks Landers to set loose standard costs this year before the continuous improvement policy is implemented. Jones argues that there is no other way to meet the tightening standards while maintaining the high quality of the Teak line.
Q-33.). E11-32B Complete and analyze a performance report (Learning Objective 4).:PAGE-656
One subunit of Speed Sports Company had following financial results last month:
Speed-Subunit X
Actual
Flexible Budget
Flexible Budget Variance
(U…